Asia-Pacific Stocks Rise While US Equities Dip Amid Trade War Concerns

Market Highlights

* Asian stocks gained, buoyed by a cautious approach from China in the escalating US-China trade war.
* US equity futures edged lower, with Google parent company Alphabet Inc. and Advanced Micro Devices Inc. weighing on after-hours trading.
* Treasury yields ticked up slightly, while the dollar index remained steady.

China Trade Response

* China opted for a measured response to the latest US tariffs, avoiding a full-blown standoff.
* Beijing's move to set the daily yuan rate stronger than 7.2 per dollar aimed to mitigate depreciation pressure.
* Goldman Sachs anticipates a 14% rise in the MSCI China Index by year-end due to anticipated policy stimulus.

US-China Tensions

* Despite Trump's reprieve for Canada and Mexico, tariffs on China went into effect.
* Beijing retaliated with tariffs, an antitrust inquiry into Google, and expanded export controls and blacklisting of US entities.
* Trump indicated no rush to engage with Xi Jinping, underscoring ongoing tensions.

Other Markets

* The Bank of Japan may exceed market consensus for benchmark rate increases, according to a former executive director.
* The yen strengthened to around 154 against the dollar.
* Oil prices declined amid trade war concerns, overshadowing Iranian sanctions reinforcements.
* US stock indexes rebounded earlier, led by a surge in "Magnificent Seven" megacaps.

Upcoming Economic Events

* Wednesday: China Caixin services PMI, Eurozone HCOB Services PMI, PPI, US trade data
* Thursday: Eurozone retail sales, UK rate decision, US initial jobless claims
* Friday: Amazon earnings, US nonfarm payrolls, unemployment data, University of Michigan consumer sentiment

Market Movements

* Stocks:
* S&P 500 futures: -0.3%
* Topix (Japan): +0.2%
* S&P/ASX 200 (Australia): +0.8%
* Hang Seng (Hong Kong): -0.9%
* Shanghai Composite: -0.3%
* Currencies:
* Bloomberg Dollar Spot Index: Little change
* Euro: $1.0379, unchanged
* Japanese yen: 153.60 per dollar, +0.5%
* Offshore yuan: 7.2868 per dollar, little change
* Cryptocurrencies:
* Bitcoin: $98,184.07, +1.7%
* Ether: $2,740.34, +3.8%
* Bonds:
* 10-year Treasury yield: 4.51%, little change
* 10-year Australian yield: 4.40%, -2 basis points
* Commodities:
* West Texas Intermediate crude: $72.81 a barrel, +0.2%
* Spot gold: Little change