Asian stocks retreated following a drop in American equities after a fresh personnel shakeup in the Trump administration spurred concerns about a unilateral approach to trade, national security and foreign affairs.

U.S. Treasuries held gains from Tuesday after a report showed U.S. inflation remained contained. Equity indexes declined across the region after the S&P 500 Index lost 0.6 percent. The sudden firing of U.S. Secretary of State Rex Tillerson took some by surprise less than a week after top economic adviser Gary Cohn resigned from the White House. The dollar weakened, while West Texas oil was holding above $60 a barrel.

“Markets one day may become exhausted if the staff turnover and perceived White House instability continues,” Terry Haines, a senior political strategist at Evercore ISI, wrote in a note. “Trump and the administration will have some work to do to reassure markets.”

Tillerson’s ouster raised concerns of a new guard in the White House that may take a harder line on trade, advancing President Donald Trump’s agenda of imposing tariffs on U.S trading partners. Trump nominated CIA director Mike Pompeo, an ex-congressman who has endorsed "pushing back against the Chinese threat," to replace Tillerson. The change comes as the administration considers tariffs on a broad range of Chinese imports, with Politico reporting one proposal is to take measures against more than $30 billion of goods a year.

“The departure of the Trump administration’s key officials might signal a hawkish shift in its foreign policy and protectionist measures,” said Ken Cheung, senior Asian FX strategist at Mizuho Bank Ltd. in Singapore. “Despite the softening U.S. dollar, further escalations in concern over global trade war and international conflicts could dampen sentiment in Asian markets.”

Meantime, the U.S. inflation report Tuesday did little to rock traders’ bets on the path for Federal Reserve policy tightening, though the 10-year Treasury yield did slip to 2.84 percent as market gauges of inflation expectations fell on the data.

With developments in Washington front, right and center, markets largely shrugged off economic data that showed China’s factory output and investment growth unexpectedly accelerated in the first two months of the year.

Elsewhere, oil was steady after declines triggered by concerns a boost in U.S. supplies will undermine OPEC efforts to clear a glut.

Here are some of the key things happening this week:

U.S. retail sales are out on Wednesday.

Prices and factory output are focal points in the euro area.

Also this week, Germany’s Angela Merkel is inaugurated to a fourth term, and EU27 government officials discuss the European Union’s Brexit position.

New Zealand GDP data is out Thursday.

And these are the main moves in markets:

Stocks

Japan’s Topix index fell 0.5 percent at the close in Tokyo.

Australia’s S&P/ASX 200 Index declined 0.7 percent.

Hong Kong’s Hang Seng Index slipped 1.3 percent and the Shanghai Composite Index was down 0.4 percent.

S&P 500 Index futures fell less than 0.2 percent after the underlying gauge dropped 0.6 percent Tuesday.

The MSCI Asia Pacific Index lost 0.6 percent.

Currencies

The Bloomberg Dollar Spot Index declined 0.1 percent.

The yen rose less than 0.1 percent to 106.52 per dollar.

The euro climbed 0.1 percent to $1.2402.

The pound added 0.1 percent to $1.3974.

Bonds

The yield on 10-year Treasuries fell one basis point to 2.83 percent, down for a third day.

Australia’s 10-year yield fell more than six basis points to 2.74 percent.

China’s 10-year government bond futures fell after the release of the better-than-expected data.

Commodities

West Texas Intermediate crude was steady at $60.73 a barrel after falling 1.1 percent on Tuesday.

Gold gained 0.1 percent to $1,328.37 an ounce.

Source: Bloomberg