Asian Shares slip, China’s Imports Disappoint

Asian shares extended losses on Monday as weak Chinese imports increased concerns over a slowdown in the world’s second largest economy, while the dollar was steady after U.S. jobs data raised chances for a U.S. interest rate hike as early as September.

European markets were seen opening mixed, as the specter of Greece’s financial woes still loomed over sentiment. Financial spreadbetters expected Britain’s FTSE 100 .FTSE to open up by 8-15 points, or as much as 0.2 percent higher. Germany’s DAX .GDAXI was seen falling by 11 to 27 points, or as much as 0.2 percent lower, while France’s CAC .FCHI was seen opening unchanged to down by 7 points, or as much as 0.1 percent lower.

“European equities are set to start mixed this morning. Although the FTSE looks set to eke out some small gains on the open, continental markets look set to sag on fears that Greece is about to go over the edge,” Jonathan Sudaria, a dealer at Capital Spreads, said in a note.

“With [Greek Prime Minister] Alexis Tsipras drawing a line in the sand on the one hand, and Greece’s creditors adamant that deeper reforms are needed to unlock any cash on the other, a default looks startlingly possible,” he said.

On Sunday, the head of the European Union rebuked Tsipras in unusually sharp terms, and warned that time was running out for Athens to reach a debt deal with its lenders to avert default.

Also the clouding the European mood, Deutsche Bank purged its leadership on Sunday, appointing Briton John Cryan as chief executive to replace Anshu Jain just two weeks after Jain was given more power to reorganize the bank.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.4 percent, while Japan’s Nikkei stock index .N225 recovered from early lows but still ended down slightly.

China’s exports fell less than expected last month, but imports tumbled at a greater pace, stoking concerns over a the economy’s slowdown giving Beijing more reason to take further stimulus steps.

China’s exports in May fell 2.5 percent from a year earlier in dollar-denominated terms, better than market expectations, while imports tumbled 17.6 percent.

Considering expectations of a slight rebound in import levels in May due to recovering crude prices, “the continuing fall in imports suggest demand side factors – softening domestic consumption – are at play,” said Chester Liaw, economist at Forecast Pte Ltd in Singapore.

 

On Wall Street on Friday, major indexes were mixed, and nearly flat for the week, while the U.S. benchmark Treasury yield marked its best weekly performance in two years and touched an eight-month high after the jobs data.

U.S. nonfarm payrolls jumped 280,000 last month, the largest gain since December, while payrolls for March and April were revised to show 32,000 more jobs were created than previously reported, the Labor Department said.

The 10-year Treasury yield US10YT=RR stood at 2.398 percent in Asian trade, compared to its U.S. close of 2.400 on Friday.

The higher yields helped power the dollar to a 13-year peak of 125.86 yen JPY= on Friday. It was last down about 0.1 percent on the day at 125.54 yen.

An index measuring the dollar against a basket of six major rivals .DXY edged up about 0.1 percent to 96.424.

The greenback gained on the euro, which remained pressured by Greece’s ongoing struggle to solve its debt crisis. The euro bought $1.1103 EUR=, down about 0.1 percent on the day.

The stronger dollar has been weighing on commodities prices, with oil logging weekly losses despite a rally on Friday.

The downbeat Chinese import figure was unsupportive for an oil market already concerned about oversupply after exporter group OPEC agreed to stick by its policy of unconstrained output for another six months on Friday.

Brent crude futures LCOc1 slipped about 0.5 percent to $62.95 a barrel, after skidding 3.6 percent last week. U.S. crude CLc1 fell 0.8 percent to $58.68 after giving up 2 percent last week.

Source: Reuters