SINGAPORE — Oil prices fell in the morning of Asian trading hours as U.S. President Donald Trump called off stimulus negotiations till after the November election.
International benchmark Brent crude futures dropped 1.88% to $41.85 per barrel while U.S. crude futures slipped 2.26% to $39.75 per barrel.
Meanwhile, Asia-Pacific markets were mostly lower in Wednesday morning trade.
Hong Kong’s Hang Seng index declined 0.25% in early trade.
Japan’s Nikkei 225 dipped 0.44% in morning trade while the Topix index shed 0.47%. South Korea’s Kospi also declined 0.14%.
The S&P/ASX 200 in Australia bucked the overall trend as it gained 0.12%.
MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.33% lower.
In corporate developments, shares of AirAsia X in Malaysia dropped 10% after the firm on Tuesday announced a debt and corporate restructuring scheme.
Trump’s ‘big gamble’
Investor reaction to Trump’s move to halt stimulus talks will be watched.
The U.S. president tweeted Tuesday: “I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business,”
“President Trump’s decision to halt negotiations until after the elections is a big gamble,” Rodrigo Catril, a currency strategist at National Australia Bank, wrote in a note.
“History tells us that the state of the economy is a big factor that can determine election outcomes, going into an election with a weakening economy more often than not means Presidents don’t get re-elected,” Catril said. “Of course there is a blaming game going on here and whether Trump can convince the electorate that this is not his fault, but the Democrats, it remains to be seen.”
Trump’s latest move came as U.S. Federal Reserve Chairman Jerome Powell on Tuesday called for continued aggressive fiscal and monetary stimulus for an economic recovery he said still “has a long way to go.”
Currencies
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 93.879 after an rise from levels below 93.6.
The Japanese yen traded at 105.64 per dollar, off levels around 105 against the greenback seen last week. The Australian dollar changed hands at $0.7103 after seeing levels above $0.715 yesterday.
Source: CNBC