Global Shares and Dollar retreat on Trump travel ban.

On Friday, President Donald Trump put a 120-day hold on allowing refugees into the United States, an indefinite ban on Syrian refugees and a 90-day block on Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen citizens. This led to Asian Share markets and US Stock Futures to fall today adding to fears that this ‘America First’ policy may be destabilizing for the rest of the world.
MSCI’s broadest index of Asia-Pacific Shares outside Japan fell 0.4 percent in holiday thinned trade.
Australian Shares fell more than 1%, while New Zealand pulled back 0.6%. Japan’s Nikkei extended losses to 0.7% as demand for the safe-haven Yen weighed on exporters. Pointing to a weaker opening on Wall Street, S&P E-mini Futures, Dow Futures and Nasdaq Futures all fell around 0.3% during the night.
US 10-year Treasury Yields were last at 2.4658%, down from 2.481% as of Friday’s close. The Dollar Index, which tracks the greenback against a basket of trade-weighted peers, dipped about 0.3% to 100.21 in Asian trade. The Dollar also weakened almost 0.7% to 114.31 Yen today, pulling further away from a one-week high hit Friday. Adding to pressure on markets, data showed on Friday that US economic growth slowed more than expected in the fourth quarter, with GDP rising at a 1.9% annual rate.
Several countries including long-standing American allies criticized Trump’s directive as discriminatory and divisive, and tens of thousands of people rallied in US cities and airports to express their outrage.
But the impact across Asia may be delayed, with China, Hong Kong, Taiwan, South Korea, Singapore and Malaysia shut on Monday for the long Lunar New Year holidays.
While US policies are causing some anxiety, investors in Asia will be focusing on the Bank of Japan’s policy meeting this Tuesday as well as manufacturing and services activity data out of China on Wednesday. Markets will also be watching US manufacturing data and the Federal Reserve meeting’s outcome on Thursday, and Friday’s non-farm payrolls figure.

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