Asia markets cautious as Trump presses Mexico on trade
SYDNEY (Reuters) - Asian shares got off to a hesitant start on Thursday as investors feared a looming US trade war with Mexico would further depress global growth, even as they wagered central banks would have to respond with fresh stimulus.
MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.01% in sparse early trade. Japan’s Nikkei dithered either side of flat, while E-Mini futures for the S&P 500 eased 0.1%.
Sentiment soured after a meeting between US and Mexican officials ended with scant sign of progress.
“Immigration discussions at the White House with representatives of Mexico have ended for the day. Progress is being made, but not nearly enough!” Trump said in a tweet. Talks will resume on Thursday.
Mexican markets were dealt an additional blow when ratings agency Fitch downgraded the country’s credit rating to BBB, while Moody’s changed its outlook to negative from stable.
All of which saw the dollar jump 0.9% against a beleaguered Mexican peso.
Wall Street had ended Wednesday in the black helped by speculation the Federal Reserve would have to cut interest rates as insurance against a tariff-driven slowdown.
Such is the enthusiasm about rate cuts that a dismal reading on US private-sector jobs was greeted with cheer on Wall Street as it seemed to add to the case for an early easing.
Two-year Treasury yields struck their lowest since December 2017 in response, while futures have priced in around 68 basis points of easing by December.
The Dow ended Wednesday up 0.82%, while the S&P 500 gained 0.82% and the Nasdaq 0.64%.