Asian stocks suffer limited losses as US dollar and bonds buckle

Asian stocks battled to hold ground after a furious flight trom US assets undermined Wall Street and the dollar

- 

Asian stocks battled to hold ground on Tuesday after a furious flight from US assets undermined Wall Street and the dollar, while concerns about the independence of the Federal Reserve piled fresh pressure on Treasuries.

Relatively limited losses in Asia did spark talk that funds could be reallocating money to equities in the area, though the impact of tariffs on economic growth remained a major drag.

President Donald Trump's increasingly vocal attacks on Fed Chair Jerome Powell for not cutting interest rates saw Wall Street indexes shed around 2.4 per cent on Monday and the dollar hit three-year lows.

"The 'sell America' trade was in full flight," said Tapas Strickland, head of market economics at NAB.

"Whether or not President Trump is legally able and willing to move against the Fed, the jousting underscores the loss of US exceptionalism and the very real policy risk for investors." The selling did abate somewhat in Asia, allowing S&P 500 futures to bounce 0.3 per cent and Nasdaq futures 0.4 per cent.

The market faces another test from earnings this week, with 27 per cent of the S&P 500 due to report. Tesla is due later in the session, having already shed almost 6% on Monday amid reports of production delays.

Others out this week include Alphabet and a host of high-profile industrials including Boeing, Northrop Grumman, Lockheed Martin and 3M.