Shares slide on trade worries, oil gives up some gains

Global share prices fell on Monday on escalating trade tensions between the United States and major economies while crude oil prices gave up some of the hefty gains made after major oil exporters agreed to a modest increase in production.

European shares, which hit multi-week lows last week, were expected to extend declines, with financial spread-betters predicting Britain's FTSE .FTSE and Germany's DAX .GDAXI would open 0.5 percent weaker, and France's CAC .FCHI to open 0.6 percent down.

In Asia, S&P500 mini futures ESc1 eased as much as 0.6 percent while MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.95 percent to 6 1/2-month lows. Japan's Nikkei .N225 lost 0.8 percent.

The Wall Street Journal reported that U.S. President Donald Trump plans to bar many Chinese companies from investing in U.S. technology firms and block additional technology exports to China.

As the threat of a full-blown trade war has become all the more real, MSCI’s gauge of stocks across the globe .MIWD00000PUS has fallen in five of the last six weeks, including last week, when it declined one percent - its biggest weekly drop in three months.

The index of global auto manufacturers .MIWO0AC00PUS remained soft after 4.7 percent fall last week,

Trump threatened to impose a 20 percent tariff on Friday on all imports of EU-assembled cars, a month after his administration launched an investigation into whether auto imports posed a national security threat.

A senior European Commission official said on Saturday that the European Union will respond to any U.S. move to raise tariffs on cars made in the bloc.

Global shares shrug off trade tensions as U.S. data reassures

Global shares rose on Monday as worries over a trade war between the United States and other major economies took a back seat, with investors focusing on an easing of political risks in Europe and strong U.S. jobs data.

The MSCI world equity index, which tracks shares in 47 countries, climbed 0.4 percent, while European stocks continued on their road to recovery with a 0.5 percent rise by 1107 GMT as tensions calmed in Italy and Spain.

Following a week in which Italian stocks hit their lowest since July, Italy’s anti-establishment parties formed a coalition government on Friday to end three months of political deadlock.

Italian bond yields fell. They soared last week on fears a snap election would be called that might effectively become a referendum on euro membership.

The spread on Spanish bond yields over benchmark German Bunds also narrowed after a new prime minister was sworn in Madrid, though Socialist Pedro Sanchez’s minority administration faces a tough baptism from a revived independence drive in Catalonia.

The euro traded at $1.1723, well clear of Tuesday’s 10-month low of $1.1506.

While the risk of political crisis receded in Europe, concerns over a possible global trade war rumbled on in the background.

Finance ministers of the closest U.S. allies vented their anger on Saturday over Washington’s imposition of metal import tariffs, setting the tone for a heated G7 summit next week in Quebec.

Asian shares extend bounce to fifth day, dollar sags to three-year low

Asian Share Markets

Asian shares rose for a fifth straight day on Friday as investor confidence slowly returns after a sharp sell-off earlier in the month, but the dollar continued its descent, hitting a three-year low against a basket of major currencies. 

U.S. debt yields stood near multi-year highs. 

Two-year note yields hit a 9 1/2-year high as bond prices fell on Federal Reserve officials’ signaling that recent volatility in U.S. stocks would not stop them raising interest rates in March. 

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5 percent, though many Asian markets were closed on Friday for the Lunar New year. 

Japan’s Nikkei rose 1.1 percent, with investors relieved to see the government appoint Bank of Japan Governor Haruhiko Kuroda for another term, in a sign the central bank will be in no rush to dial back its massive stimulus program. 

Measured by the MSCI’s broadest gauge of the world’s stocks covering 47 markets, global shares have now reclaimed more than half of the 10.7 percent plunge from a record intraday high on Jan. 29 to a four-month intraday low a week ago. 

Investors have been reassured by a fall in the Wall Street Vix index, the “fear gauge” that measures the one-month implied volatility of U.S. stocks. 

The index dropped below 20 for the first time since its spike to 2 1/2-year high of 50.3 last week, a jump that caused massive losses among investors who bet equity markets would be stable on a combination of solid economic growth and moderate inflation. 

The Vix futures fell back to more normal patterns, from the past several days of so-called backwardation, in which the front-month contract becomes the most expensive. 

The return of a more usual curve suggested that the loss-cutting and position unwinding of “volatility short” strategies had run its course for now, easing investors’ nerves. 

The U.S. dollar, on the other hand, slipped below its January low against a basket of major currencies to reach its lowest since late 2014. 

The dollar index fell to as low as 88.37, and was on course to lose over 2 percent for the week, its biggest such loss in two years. 

There is no strong consensus yet on what is driving the dollar’s persistent weakness, especially in light of rising yields. 

Some say it simply reflects a return of risk appetite and a shift to higher-yielding currencies, including many emerging market ones. 

But others cite concerns that Washington might pursue a weak dollar strategy as well as talk that foreign central banks may be reallocating their reserves out of the dollar. 

There are also worries President Donald Trump’s tax cuts and fiscal spending could stoke inflation and erode the value of the dollar. 

The euro rose to $1.2545, its highest since December 2014. 

The dollar changed hands at 106.15 yen, having fallen to as low as 106.015, its lowest level since November 2016. 

The yen showed little reaction to the government’s reappointment of Kuroda or its nomination of an advocate of bolder monetary easing as one of his deputies. 

The South African rand hit a three-year high of 11.6025 to the dollar on Thursday on hopes the resignation of President Jacob Zuma had paved the way for new leaders to speed up economic growth. 

The dollar’s fall came even as U.S. bond yields remained near a multi-year high. 

The 10-year U.S. Treasuries yield hit a four-year peak of 2.944 percent on Thursday and last stood at 2.906 percent. 

Shorter-dated yields also rose as investors grew convinced that the correction in stock prices in recent weeks would not prevent the Fed from raising interest rates in March and twice more this year. 

Cleveland Fed president Loretta Mester said on Tuesday the recent stock market sell-off and jump in volatility will not damage the economy’s overall strong prospects. 

Mester is being considered a leading candidate for the Fed’s Vice Chair. 

The two-year yield rose to as high as 2.213 percent, its highest since Sept 2008. 

Oil prices maintained this week’s gains, with U.S crude futures trading at $61.71 per barrel, up 4.3 percent so far this week. 

Elsewhere, virtual currency bitcoin recovered the $10,000 mark for the first time in two weeks to trade at $10,208, gaining 72 percent from its near three-month low of $5,920.7.

World stocks head for record 12th month of gains

World stocks headed for a record twelfth month of gains on Tuesday, as a 5 1/2-month high in European stocks and records elsewhere underscored one of the most robust bull markets on record.

Europe’s latest rally came as figures from the once-fragile euro zone showed its growth now running at 2.5 percent year-on-year and unemployment at its lowest since early 2009 at under 9 percent. 

It helped Europe’s main bourses <0#.INDEXE> extend modest early gains[.EU] ahead of what was expected to be a higher start for Wall Street and Asia had mostly risen despite some disappointing industrial data from China.

Focus also remained on the dollar which was set for its biggest monthly rise since February, having been knocked back slightly on Monday by fresh political unease [/FRX]. 

Federal investigators probing Russian interference in the 2016 U.S. election charged President Donald Trump’s former campaign manager, Paul Manafort, and another aide, Rick Gates, with money laundering. 

Italy’s borrowing costs however were set to end October with their biggest monthly drop in more than two years after a surprise ratings upgrade, the extension of the ECB’s bond buying program and the approval of a new electoral system. 

Italy’s benchmark 10-year bond yield had fallen to its lowest level in around 10 months before the data at 1.837 percent IT10YT=TWEB. It is down over 30 basis points this month, which is the biggest move since July 2015.

Shares in heavyweight oil major BP (BP.L) jumped more than 3 percent to their highest since July 2014, after third quarter profits beat expectations and it announced a share buyback program.

Ryanair (RYA.I), hurt recently by canceled flights, climbed more than 5 percent after it maintained its full-year profit guidance, though BNP Paribas (BNPP.PA) sank 3 percent after its results disappointed. 

So far, more than 40 percent of MSCI Europe companies have reported results for the third quarter, of which 65 percent have either met or beaten expectations, according to Thomson Reuters I/B/E/S data.

Financials and tech are sectors standing out for their large proportion of beats. [.EU]

Simmering Korea tensions hit global stocks and dollar

Global shares fell and the dollar dipped against the Japanese yen on Wednesday as still-simmering tension over the Korean peninsula kept investors wary of taking on risk. 

European and Asian shares dropped after the S&P 500 .SPX suffered its biggest one-day fall in three weeks on Tuesday as U.S. investors sold in reaction to North Korea's sixth and biggest nuclear weapons test on Sunday. 

These concerns helped push benchmark 10-year U.S. Treasury yields US10YT=TWEB to their lowest in almost 10 months and they stayed close to those levels on Wednesday. 

European markets had appeared largely to shrug off Pyongyang’s latest test by Tuesday, focusing instead on Thursday’s meeting of European Central Bank policymakers, which is expected to yield some clues as to when they will begin to scale-back monetary stimulus.

South Korean President Moon Jae-in told his Russian counterpart Vladimir Putin at an economic summit in Vladivostok that the situation on the Korean peninsula could become unpredictable if Pyongyang did not halt its provocative actions.

European shares opened lower. The pan-European STOXX 600 index fell 0.3 percent, with an index of banks .SX7P losing 0.5 percent. 

The dollar dipped 0.1 percent against a basket of currencies .DXY and was down 0.2 percent versus the yen JPY=, which investors often seek during uncertain times. 

Safe-haven government debt was against in demand. Ten-year Treasury yields US10YT=RR were flat at 2.07 percent, having fallen as far as 2.065 percent on Tuesday.

Indeed, the average yield on local currency emerging market sovereign debt dropped below 6 percent for the first time since February 2015. 

Fed Governor Lael Brainard said on Tuesday the central bank should be cautious about tightening policy further until it was clear inflation was heading towards target. 

German 10-year yields, the euro zone benchmark, hit their lowest in a week at 0.325 percent DE10YT=TWEB.

Global shares rise, euro near 14-month high ahead of ECB

World shares extended a run of record highs on Thursday, as a cautious sounding Bank of Japan lifted Asian stocks to a near decade peak and Europe wagered on an incremental increase in confidence from the ECB at its latest meeting. 

The euro was near a 14-month high and investors were riding a global rally in stocks as Asia's and then Europe's early 0.4 percent gains .FTEU3 ensured MSCI's 47-country All World index .MIWD00000PUS was up for a 10th straight session. 

It is its longest winning streak since February 2015 and was showing little sign of fatigue even as bond yields - the key driver of global borrowing costs - edged higher again. [GVD/EUR] 

They were lifted as oil prices LCOc1 held near 2 percent gains made the previous session when falling U.S. crude inventories gave the market a lift ahead of a key OPEC meeting next week.

The day's focus though was squarely on the Japanese central bank's decision to push back its ambitious inflation target again and on whether European Central Bank head Mario Draghi would give a hint later that it plans to wind down its 60 billion-euro-a-month stimulus programme.

ECB President Draghi opened the door to policy tweaks in a speech last month that was viewed as unexpectedly hawkish, sending the euro EUR= and government bond yields rallying. 

The euro EUR= is up almost 10 percent so far this year but and was a shade lower at $1.1513 ahead of Draghi's 1230 GMT post-meeting news conference, having hit a 14-month high of $1.1583 on Tuesday.

The yen meanwhile had weakened to 112.135 yen per dollar JPY=D4 after the BOJ pushed back its projected timing for hitting its 2 percent inflation target until 2020. 

With both its main rivals down, the dollar rose for a second straight day climbing 0.3 .DXY against a broader basket of trade-weighted peers. 

The other main mover was the Australian dollar AUD=D4 as it set a new two-year high, still heady from an upbeat sounding Reserve Bank of Australia earlier in the week. It eventually pulled back to trade at $0.7939 in Europe. 

In commodities, Brent crude futures LCOc1, the international benchmark for oil prices, were flat at $49.75 per barrel. U.S. West Texas Intermediate (WTI) futures CLc1 also barely budged at $47.18.

Gold XAU= slipped to $1,237 an ounce as the dollar pulled higher, while government bonds, also seen as safe-haven assets, saw modest selling ahead of the ECB meeting.