Asian Stocks Give Ground as Trump-Worrying Dominates

Talking Points:

• Asian stocks were under a bit of pressure as a new week dawned
• The US’ targeted ban on refugee arrivals has investors worried about some of the new President’s more extreme campaign rhetoric
• The US Dollar was pressured too, with last week’s disappointing data still weighing

Asian stocks lost ground on Monday, with investors reportedly leery of US President Donald Trump’s immigration policies and what else they might portend.

Many countries have expressed concern at Trump’s executive order which blocks refugees from seven Middle Eastern countries from unerring the US for four months. Attorney Generals from around the US have called the move “unconstitutional” and pledged to fight it, according to wire reports.

Signs that the new administration is prepared to follow through on some of its more aggressive campaign rhetoric has the potential to unsettle markets, and this looks like what we’ve seen on Monday. Many Asian markets including Hong Kong, Singapore, New Zealand and mainland China will have seen sparsely populated or closed trading desks, as Monday was a holiday in all of them.

But those markets that were open closed lower. Japan’s Nikkei 225 shed 0.5%, with a weak snapshot of December’s retail activity probably not helping. The Bank of Japan’s two-day monetary policy meeting begins on Monday. It’s expected to leave the settings alone this month and may also offer investors hope that its vast stimulus plan will endure. Further South Australia’s ASX benchmark shed 0.9% with losses incurred almost across the board. Gold miners were the clear exception and the metal itself ticked up through the Asian session.

Turning to foreign exchange, it was a tougher session for the US Dollar. Trump worries and the memory of some lackluster US growth and durable goods order numbers last week conspired to keep the greenback in the red.

There will be plenty for investors to keep an eye on through the European and US sessions. Official German consumer price data will probably keep them busy though the former. The latter will offer personal consumption and expenditure data, with investors keen to see whether these can offer any reassurance following last week’s disappointments.

Well, it may be your favorite currency, but is it anyone else’s? Check out the DailyFX sentiment page.

--- Written by David Cottle, DailyFX Research

Contact and follow David on Twitter: @DavidCottleFX