US stock futures and the dollar fell on Monday while Asian markets struggled as President Donald Trump’s failure on healthcare reform raised questions about his ability to push through tax cuts and fiscal spending to boost the economy.

Trump’s inability to get enough support from his own Republican party to “repeal and replace” the Obamacare health insurance reforms, a major campaign promise, also spurred a rush to safety assets such as gold and the Japanese yen

US stock index futures fell 0.7 per cent to a six-week low in heavy volume, suggesting a weaker start on Wall Street later in the day.

So-called “Trumpflation trades” — betting on an extended recovery in the US and global economies and related assets such as commodities — came under heavy selling pressure.

“Markets have had a good run recently and this is a good opportunity for profit taking across counters,” said Alex Wong, a fund manager at Ample Capital Ltd. in Hong Kong, with about $130 million under management.

But Wong said the selloff is likely to be limited as cashed-up investors waited on the sidelines.

MSCI’s broadest index of Asia-Pacific shares outside Japan was broadly flat after posting its first weekly decline last week in three weeks.

Japan’s Nikkei fell 1.5 per cent as the yen rebounded in the face of renewed US dollar weakness.

Rising US policy uncertainty also raised concerns that a recent pick-up in global business and consumer sentiment, particularly in Asia, would start to fade.

In terms of relative valuations, US stocks are trading well above their historical averages, while Asia stocks are still broadly in line despite a recent bounce.

“Any big pull back in markets would be an opportunity for long term investment in a region where potential is still intact, said Nicholas Yeo, head of China/Hong Kong equities at Aberdeen Asset Management in Hong Kong, part of a team that manages $374 billion in assets as of end-December 2016.

Dollar stumbles

The dollar fell to a near two-month low against a basket of currencies.

The dollar index was down 0.3 per cent at 99.287, its lowest since February 2.

It had risen to a 14-year high near 104.00 early in January when expectations for significant stimulus under the Trump presidency were at their peak.

“There isn’t much going for the dollar right now and the market will be bracing for its further decline.” said Shin Kadota, senior strategist at Barclays in Tokyo.

Fresh off the defeat on US healthcare legislation on Friday, the White House warned rebellious conservative lawmakers on Sunday that they should get behind Trump’s agenda or he may bypass them on future legislative fights, including tax reform.

The Republican head of the tax-writing committee in the House of Representatives said he hoped to move a tax bill through his panel this spring.

The euro was 0.45 per cent higher at $1.0847 following a rise to $1.0849, its strongest early December.

US Treasury yields were trading near one-month lows with ten-year bonds trading near 2.36 per cent, its lowest levels since February 28.

Shanghai Futures Exchange copper slid 0.7 per cent to 46,680 yuan ($6,785) a tonne, while Australia’s benchmark metals and mining index declined as much as 1.7 per cent, its lowest since March 14.

Oil prices were broadly flat as investor concerns lingered that OPEC-led supply cuts were not yet reducing record US crude inventories.

US crude was trading slightly higher at $48.15 per barrel.

Safe-haven gold perked up, rising to $1,253 an ounce.

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