Asian stocks tumbled on Wednesday as worries over the effects of political turmoil in Italy and renewed trade tensions between the US and China shook the financial markets. US equities rallied the most, Treasuries rose, oil collapsed and the yen rebounded.
Equities fell in Tokyo, Sydney and Seoul, and futures dampened losses in the rest of Asia after European equities posted their largest decline in two months, accelerating a decline in American equities. Ten-year Treasuries consolidated after yields fell 17 basis points. This was the highest level since the UK in June 2016. The dollar stabilized and the euro was the lowest since July 2017. Volatility rose and investors sought refuge assets from the yen to the Swiss franc
The prospect of Italy holding a new election which could be a referendum on the country's entry into the eurozone shook the markets. Investors are also watching the White House, with the Trump government giving conflicting signals for talks with North Korea and plans for tariffs on Chinese goods.
Summary of the political turmoil in Italy and its impact on markets  "As the third largest economy in the EU, as highly indebted, and with eurosceptics apparently in the emerging markets have been worried that the EU will again be an existential crisis AxiTrader Chief Market Strategist Greg McKenna said
Elsewhere, the oil market continued to be shaken, with the West Texas Intermediate Crude had its longest term of losses since February on the OPEC plans to restore production. Saudi Arabia, Kuwait and the U.A.E. (19659005) Terminal users can read more in Bloomberg's Markets Live Blog.
These are some key events to watch this week:
- Bank Indonesia is expected to regularize its benchmark rate by 25 basis points to 4.75 percent during a special session on Wednesday, about a month before the next one Assembly. It would be the second in two weeks.
- The Governor of the Bank of Japan, Haruhiko Kuroda, speaks at an annual BOJ conference in Tokyo.
- EU trade chief Cecilia Malmstrom and US Secretary of Commerce Wilbur Ross meet in an informal world on Wednesday Ministerial meeting of the Paris Trade Organization
- The US labor market report for May is due on Friday. It's the last one before the Fed meeting in June.
- Automobile manufacturers report US sales on the same day.
- Also Friday: China's stock market joins the global indices of MSCI Inc.
- US Secretary of Commerce Wilbur Ross will be attending talks with Deputy Prime Minister Liu He on topics such as ZTE Corp. and trade travel to Beijing.
These are the main steps in the markets:
- The Topix Index fell 1.7 percent after 9:27 am in Tokyo, heading for the biggest decline in two months.
- S & P / ASX 200 index fell 0.8 percent.
- Kospi index fell 1.3 percent.
- Hang Seng Index futures fell 0.6 percent.
- S & P 500 index futures lost 0.2 percent. The S & P 500 fell 1.2 percent, falling below its 100-day average for the first time since 9 May.
- The Bloomberg Dollar Spot Index edged up 0.4 percent to its highest level in more than five months
- The Japanese yen climbed 0.3 percent to $ 108.49 a stretch This is 0.7 percent higher than the strongest increase in five weeks.
- The Euro traded at 1.1540 after falling to the weakest in more than 10 months The British pound hardly changed at $ 1.3251, the weakest in about six months.
- 10-year Treasury yields rose one basis point to 2.79 percent. It fell 15 basis points to 2.78 percent, the lowest level since 2 April on Tuesday.
- The Australian 10-year bond yield dropped nearly seven basis points to 2.62 percent.
- Italy's 10-year yield rose 48 basis points to 3.164 percent.
- West Texas Intermediate crude was stable at $ 66.73 a barrel.
- Gold rose 0.1 percent to $ 1,300.62 per ounce.
– With the support of Randall Jensen and Nancy Moran