Asian stocks retreated with U.S. equity-index futures while the dollar extended gains as the European Central Bank’s surprise asset-purchase plan underscored diverging economic outlooks before U.S jobs data.
The MSCI Asia Pacific Index dropped 0.5 percent by 12:20 p.m. in Tokyo, while Standard & Poor’s 500 Index futures slipped 0.2 percent. South Korea’s won fell 0.6 percent and the New Zealand dollar weakened to a six-month low. The Bloomberg Dollar Spot Index added 0.1 percent, set for its highest close since July 2013. The yen decreased to as low as 105.71 per dollar and the euro held near a 14-month low. Wheat and corn futures rebounded.
After data showed U.S. service industries grew at the fastest pace in nine years last month, payrolls reports today are expected to signal continued recovery as the Federal Reserve presses on with reductions to its asset purchases. European bonds rallied yesterday as the ECB unexpectedly cut key interest rates and announced a plan to buy privately owned securities, while the Bank of Japan maintained record stimulus. Ukraine’s President Petro Poroshenko voiced “careful optimism” that talks today with pro-Russian rebels will set the course for a cease-fire.
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