Donald Trump’s threat to shut down the U.S. government looks set to preoccupy markets in Asia on Thursday as it triggered concerns Congress won’t easily raise the debt ceiling and deliver on tax reform. Japanese stock-index futures fell while Australian bond contracts advanced. Equity-index futures rose in Australia and were little changed in South Korea. All major American equity benchmarks retreated and the 10-year Treasury yield hit the lowest since June as Trump’s gambit prompted Fitch Ratings to warn the country risks a review of its sovereign rating if it fails to raise the limit next month. The dollar slipped amid July data on U.S. home sales highlighted patchy U.S. growth. Trump’s latest remarks, which included talk of ending the North American Free Trade Agreement, rekindled concerns about the administration’s ability to deliver on its fiscal plans and heightened unease about the future of global trade. A day earlier, his treasury secretary said getting Congress to raise the debt ceiling and reforming the tax code were priorities, sparking a rally of 1 percent in the S&P 500 Index. European Central Bank President Mario Draghi avoided giving any clues on the ECB’s current thinking in a speech in Germany in which he said central banks must be open-minded on policy innovations as they prepare for future economic developments. Draghi will be back in the spotlight with Federal Reserve Chair Jane Yellen as they are both due to speak on Friday at the annual gathering of global central bankers in Jackson Hole, Wyoming. Terminal subscribers can read more on our Markets Live blog. Among other key events looming this week:
  • New Zealand and Hong Kong trade balances are due Thursday.
  • Combined sales of previously owned U.S. homes (Thursday) has probably edged up in July from the prior month, indicating a still robust real estate market held in check by rising property prices, economists forecast.
  • Federal Reserve Chair Yellen is scheduled to speak about financial stability at 10 a.m. New York time on Friday at the Kansas City Fed’s symposium. ECB President Mario Draghi is set to give a speech at 3 p.m.
Here are the main moves in markets: Stocks
  • Futures on the Nikkei 225 Stock Average fell 0.2 percent, while those on the Kospi index were up less than 0.1 percent. Contracts on Australia’s S&P/ASX 200 Index rose 0.1 percent. 
  • Hong Kong reopens after the trading session was canceled on Wednesday as Typhoon Hato slammed into the city.
  • Futures on the S&P 500 fell 0.2 percent as of 7:21 a.m. in Tokyo. The underlying measure fell 0.3 percent.
Currencies
  • The yen advanced 0.2 percent at 108.85.
  • The Bloomberg Dollar Spot Index fell 0.3 percent in the previous session.
  • The euro was trading at $1.1810 after gaining 0.4 percent on Wednesday.
Bonds
  • The yield on 10-year Treasuries fell five basis points to 2.17 percent, the lowest since June 26.
  • The German 10-year bund yield dipped two basis points to 0.38 percent, as the note rose for the fifth consecutive time on a closing basis.
Commodities
  • West Texas Intermediate crude held onto gains at $48.36 a barrel. It climbed 1.6 percent as oil stockpiles have dropped every week since late June and gasoline inventories also fell, while crude production climbed for a second week, according to an EIA report Wednesday.
  • Gold was steady at $1,291.13 an ounce after gaining 0.5 percent on Wednesday.