Asian markets traded mixed on Tuesday as traders showed concern about escalating tensions with Qatar and angst about upcoming news events including an ECB meeting this week and the testimony of former FBI director James Comey, as well as the British elections in which current Prime Minister Theresa May is sliding in the polls. May currently leads the polls by just 1 percentage point.
Japan’s Nikkei 225 index was down 0.67 percent and China’s Shanghai Composite was down 0.22 percent. Hong Kong’s Hang Seng Index started the day on the downside but reversed its downtrend to trade up 0.35 percent. MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.2 percent.
Commodities and Currencies
Oil prices which had risen on Monday following the severing of diplomatic ties with Qatar by four nations, retreated during Tuesday’s Asian session. U.S. WTI crude futures were down 0.57 percent to $47.13 per barrel while Brent futures were down 0.51 percent to $49.22 per barrel.
The U.S. dollar index which tracks the currency against its major trading partners was down to its lowest level since November 2016 following data out on Monday that showed a decrease in activity in the U.S. services sector and a decline in new orders. The dollar was also impacted by the stronger euro as analysts predicted that the ECB will take a less-dovish tone at its meeting this Thursday.
The Australian dollar struggled on Tuesday morning before heading higher after the Reserve Bank of Australia (RBA) kept its benchmark cash rates at a record low of 1.5 percent, indicating weaker growth in the first quarter of 2017. Australia’s GDP data expected Wednesday is likely to be weaker than expected as well. As of 7:03 a.m GMT, the Aussie was trading at 0.749 against the dollar.