S&P 500 slips, but losses kept in check as Nvidia climbs ahead of results
* Focus back on macro as earnings season recedes
* MSCI AxJ dips marginally from two-year peak
* Dollar steady as traders wait for Powell speech
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Tom Westbrook and Katanga Johnson
SINGAPORE/WASHINGTON, Aug 26 (Reuters) - Asian stocks eased
from a two-year high on Wednesday, as a mixed bag of economic
data had investors a touch more circumspect about the global
recovery, while oil jumped to a five-month peak owing to a
hurricane disrupting output in the Gulf of Mexico.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS edged down 0.1% after hitting its highest since
mid-2018 on Tuesday. Japan's Nikkei .N225 was off 0.1%.
The U.S. dollar nursed small losses in currency trading,
though moves were muted ahead of a key Thursday speech from
Federal Reserve Chairman Jerome Powell in which he is expected
to outline the central bank's next steps. FRX/
A day ago, investors had been cheered by signs of progress -
or at least the lack of deterioration - in Sino-U.S. trade
relations. But as company earnings season wraps up, and focus
comes back to economic data, the outlook is turning murkier.
Consumer confidence dropped to a more than six-year low in
the United States this month, data showed on Tuesday,
overshadowing a boom in new home sales. "If you look at the macro numbers, a lot of the improvement
in Q2 seems to be slowing down in momentum," said Tai Hui, Hong
Kong-based J.P. Morgan Asset Management's chief market
strategist in Asia.
"Central banks and governments are not really announcing
anything new, and so markets are in a bit of a sideways move at
this point in time."
In commodity markets oil prices hung on to overnight gains
as U.S. producers closed offshore output and battened down as
Hurricane Laura drives toward the Gulf coast. O/R
Producers evacuated 310 offshore facilities and shut 1.56
million barrels per day of crude output, 84% of Gulf of Mexico's
offshore production - near the 90% outage that Hurricane Katrina
brought 15 years ago. Brent crude futures LCOc1 sat by a five-month high touched
on Tuesday at $45.95 a barrel and U.S. crude futures LCOc1
likewise held steady at $43.31 a barrel, though analysts believe
the lift is temporary.
"As Hurricane Laura fades, oil markets will once again
return to the grim reality of challenging demand growth and
significant excess capacity," said Commonwealth Bank of
Australia analyst Vivek Dhar in a note.
"While global oil demand is expected to trend higher from
here, total oil consumption isn't expected to return to
pre-COVID levels until 2022."
WAITING FOR JAY
With a light data calendar for the rest of the day, currency
and bond markets are firmly focused on Powell's Thursday speech.
Stronger-than-expected business sentiment in a German survey
on Tuesday had again underpinned the euro by buttressing
markets' belief that the continent can bounce back from the
coronavirus faster than the United States.
The common currency EUR=EBS last sat at $1.1824, but risks
to the downside abound thanks to stretched positioning and the
possibility that Powell does not sound as dovish as investors
expect - particularly on the issue of inflation targeting.
"Dovish expectations seem to be quite loaded for this event,
and the dollar may bounce if Powell disappoints the doves," said
OCBC Bank currency strategist Terence Wu.
Overnight, investors had lapped up $50 billion of two-year
U.S. Treasuries at auction but the long end of the yield curve
steepened as some prepared for the prospect of higher inflation.
The yield on benchmark 10-year U.S. government debt
US10YT=RR crept higher from the New York close during the Asia
session to sit at 0.6949% and the move weighed on the yen as the
better returns tend to attract Japanese investors.
The yen JPY= was last at 106.45 per dollar. Gold XAU=
was steady at $1.930.80 an ounce and S&P 500 future ESc1
traded flat in Asia.
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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
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