China stocks hit turbulence with Asian shares sinking

Asian Stock Markets

Chinese stocks went into a tail spin on Tuesday as turbulence gripped equity markets in Asia, which sank to nine-month lows as investors feared the Sino-U.S. trade row could derail a rare period of synchronized global growth. 

Speculation was rife the central bank in China was intervening in the currency market to staunch losses and prevent a potentially destabilising sell-off in the yuan.

Chinese financial markets have been jittery ahead of a July 6 deadline, when the U.S. is set to slap tariffs on $34 billion worth of Chinese goods that Beijing has vowed to match with tariffs on U.S. products.

The trade row between the United States and major economies has rattled financial markets in the past several weeks, with no sign U.S. President Donald Trump is about to back down from his ‘America First’ protectionism policies that many fear will harm the global economy.

The Asia Pacific MSCI index ex-Japan .MIAPJ0000PUS tumbled 1.4 percent to its lowest since September 29, while Japan's Nikkei average .N225 was down 0.86 percent to a near three-month low.

Chinese stocks were hit the most, with Hong Kong's Hang Seng index .HSI diving 3.3 percent to its lowest level in ten months, the Shanghai Composite Index .SSEC shedding 1.9 percent to hit a fresh 28 month low.


The Chinese yuan CNY=CFXS, on a downward spiral since mid-June, slipped past 6.7 per dollar in early trading on Tuesday for the first time since Aug. 9, 2017 before paring losses on talk of intervention by the Chinese central bank.

The central bank put the midpoint CNY=PBOC roughly in line with market expectations at 6.6497 yuan per dollar, its weakest level in about 10 months, setting the stage for the day's drop.

The yuan was last traded at 6.6998 per dollar.

Trump told the World Trade Organization on Monday that “we’ll be doing something” if the United States is not treated properly, just hours after the European Union said that U.S. automotive tariffs would hurt its own vehicle industry and prompt retaliation.

Officials in China, the epicentre of the international trade row, have warned the United States that the ti-for-tat tariffs on each others goods will ultimately prove detrimental for American businesses and jobs. L4N1TN1RH

Elsewhere in currency markets, the euro EUR=, which had been pressured by political uncertainty in Germany, pared losses after Chancellor Angela Merkel's conservatives settled a row over migration that threatened to topple her governing coalition after interior minister Horst Seehofer dropped his threat to quit.

The euro last traded at $1.1632 EUR=, after shedding 0.45 percent overnight.

The dollar last stood at 110.82 yen, giving up gains following sharp falls in Chinese shares.

Investors are also keeping an eye on the Reserve Bank of Australia’s (RBA) policy meeting later on Tuesday for any mention of the U.S.-China trade tensions. The central bank is considered certain to maintain rates at 1.5 percent, where they have been since mid-2016.

China is Australia’s major export market and its currency, the Australia dollar, is considered a liquid proxy for China-related risk.

The Aussie dollar was not far off a 1-1/2-year low of $0.7311 AUD=D4 plumbed on Monday, fetching $0.7328.

Oil prices climbed on Tuesday after Libya declared force majeure on some of its supplies, with Brent crude LCOc1 rising 0.83 percent to $77.94 per barrel and West Texas Intermediate (WTI) crude CLc1 was up 0.87 percent to $74.58 a barrel.

Asian shares hit 2-1/2-month high; euro, yields up after ECB comments

Asian shares rose to a fresh 2-1/2-month high on Thursday, supported by sound economic fundamentals, while expectations the European Central Bank (ECB) could start to wind down its stimulus boosted the euro and global bond yields.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS advanced 0.4 percent to extend its gains, hitting a 2-1/2-month high for a second straight day. Japan's Nikkei average .N225 rose 0.8 percent.

Notable gainers include the technology-heavy Taiwanese stocks, with Taiwan's main index .TWII nearing the 27-year high of 11,270 hit on January 23. The index has rallied 4.25 percent since last Wednesday, boosted by the rally in tech stocks and the Nasdaq.

The euro EUR= held near a two-week high while Germany's benchmark 10-year bond DE10YT=TWEB hit its own two-week high of 0.486 percent growing conviction the European Central Bank would announce as early as next week its intention to end a drawn-out stimulus programme by year-end.

ECB Chief Economist Peter Praet said on Wednesday that robust growth made the central bank increasingly confident that inflation is on its way back to target, raising the chances it may use next week’s meeting next week to reveal more about the end of its bond-buying program.

Praet's comments sent the euro to $1.1796 EUR=, its highest level since May 22, on Wednesday. The common currency last traded up 0.1 percent at $1.1789. The dollar index .DXY was down 0.1 percent to 93.525.

Higher yields helped to lift S&P 500 financials .SPSY, which rose 1.8 percent and were the biggest percentage gainer among S&P 500 sectors.

China's yuan set for worst month since Nov 2016

Asian Stock Markets

China's yuan extended its losses against the U.S. dollar to a 4-1/2-month low on Wednesday, dragged lower by a weaker midpoint and a buoyant dollar amid Italy's deepening political crisis. The Chinese currency is poised to lose around 1.5 percent for May, its worst month since November 2016.

The renminbi continued to lose momentum as the People's Bank of China (PBOC) was putting up little protests and allowing the currency to "freely adjust" to the surging dollar, he said in a
research note.

The dollar firmed on a weaker euro, which was buried near multi-month lows against major rivals. Investors fear that repeat elections in Italy - which could come as soon as July -may become a de-facto referendum on Italian membership of the currency bloc.

The global dollar index, a gauge that measures the unit's strength against a basket of six major currencies, stood at 94.886 as of midday, near the technical double-top around 95.15 touched in October and November last year.

Prior to market opening, the PBOC lowered its official yuan midpoint for the fifth straight trading day to 6.4207 per dollar, the weakest since Jan. 18. The midpoint was 186 pips or 0.29 percent weaker than the previous fix at 6.4021.

Wednesday's official guidance rate was the lowest since Jan. 18, and also marked the biggest one-day weakening in percentage terms in two weeks.

In the spot market, the onshore yuan opened at 6.4220 per dollar and eased to a low of 6.4290 at one point in morning trade, the lowest since mid-January.

As of midday, the onshore spot was changing hands at 6.4266, 116 pips weaker than the previous late session close and 0.09 percent softer than the midpoint.

The offshore yuan was trading 0.05 percent firmer than the onshore spot at 6.4234 per dollar as of midday.

Traders said losses in the yuan has not yet triggered panic dollar buying in the market, unlike what they witnessed in late 2015 and 2016.

In late 2015 and 2016, strength in the greenback fuelled one-way bets on yuan depreciation and prompted companies and households to stock up on dollars. Continuous selling in the yuan during that period forced major state-owned banks to sell dollars as part of official efforts to prop up the yuan.

The market focused once again on trade frictions between the world's two largest economies after the United States said on Tuesday it would continue pursuing actions on trade with China.

It would impose tariffs on $50 billion of Chinese imports unless Beijing addressed the issue of theft of American intellectual property.

U.S. Commerce Secretary Wilbur Ross is scheduled to visit Beijing from June 2 to June 4.

Guan Tao, a former foreign exchange regulator official, told Reuters in an interview on Tuesday there had been limited impact on the yuan from trade friction between the United States and China so far, while China's shrinking current account surplus will not necessarily lead to yuan depreciation.

HKEX Global CNH index, which tracks the offshore yuan against a basket of currencies on a daily basis, stood at 98.23, firmer than the previous day's 98.2.

Offshore one-year non-deliverable forwards contracts (NDFs), considered the best available proxy for
forward-looking market expectations of the yuan's value, traded at 6.535, 1.75 percent weaker than the midpoint.

One-year NDFs are settled against the midpoint, not the spot rate.

Asian shares defensive but North Korea's stance soothes nerves

Asian Stock Markets

Market sentiment was a little shaky on Friday with Asian shares on the defensive after U.S. President Donald Trump scrapped a key summit with North Korea, though investors’ fears were calmed by Pyongyang’s measured response to the cancellation. 

North Korean Vice Foreign Minister Kim Kye Gwan said Pyongyang still hoped for a “Trump formula” to resolve the standoff over its nuclear weapons programme, noting that North Korea was open to resolving issues with the United States.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was almost flat, while South Korea's Kospi .KS11 pared much of its earlier loss of 0.9 percent. Japan's Nikkei .N225 was up 0.1 percent.

On Wall Street the S&P 500 .SPX ended 0.2 percent lower on Thursday, though it clawed back a large part of its earlier loss of 0.95 percent.

Even before the reaction from Pyongyang, there were no immediate signs of widespread investor panic with Wall Street’s volatility index .VIX, seen as a gauge of investors’ fears, ending at a four-month low on Thursday.

Analysts said that level of calm reflected investors becoming accustomed to Trump’s dramatic negotiation style, in which he makes drastic calls before making compromises, and are increasingly seeing his North Korea’s Kim Jong Un adopt a similar approach.

“I suspect they couldn’t agree on denuclearisation. But looking at comments from the both sides, none of them is ruling out holding a meeting in the future. So I do not expect to see an immediate escalation in military tension,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

Adding to political jitters was Trump’s raising the spectre of high U.S. tariffs on imported cars, reigniting fears of a trade war, although some investors see this as a Trump tactic to get better deals from big car-exporting countries.

The 10-year U.S. Treasuries yield US10YT=RR dipped to as low as 2.955 percent on Thursday as bond prices rose before it ticked back to 2.992 percent in Asia on Friday. It is still off a seven-year high of 3.128 percent hit a week ago.

“For many Asian markets, rises in U.S. bond yields would have been a bigger problem (than cancellation of the meeting between Trump and Kim),” said Yukino Yamada, senior strategist at Daiwa Securities.

Worries that investors could shift assets from emerging markets to higher-yielding U.S. bonds have been a major headwind for emerging markets.

The yen slipped in Asia after hitting a two-week high against the dollar on Thursday in a reflex flight-to-safety reaction to Trump’s manoeuvres.

The dollar traded at 109.60 yen JPY=, up 0.3 percent for the day. But it was still off Monday's four-month high of 111.395 yen and looks set to post its first weekly loss in nine weeks.

The yen is seen as a safe haven because of Japan’s status as the world’s largest net creditor nation.

The dollar extended its losses against the Swiss franc to hit 0.9886 franc overnight, its lowest level since April, before steadying at 0.9921 CHF=.

The euro traded at $1.1712 EUR=, slightly above its six-month low of $1.1676 touched on Wednesday, on course to mark its sixth consecutive declining week.

he currency was dogged by worries of a new coalition government in Italy to be formed by two anti-establishment parties, as well as mounting signs of an economic slowdown in the euro zone.Among emerging market currencies, the Turkish lira tumbled again, giving up a large chunk of the gains it made after the central bank raised interest rates by 300 points on Wednesday.

The lira has been hit by concerns about the central bank’s ability to tame double-digit inflation, particularly after President Tayyip Erdogan — a self-described “enemy of interest rates” — said he expected to assert more policy control after June 24 elections.

The lira TRYTOM=D3 fell 1.5 percent in Asia on Friday.

Oil prices slipped, partly on speculation reduced supplies from Venezuela and Iran could prompt the Organization of the Petroleum Exporting Countries (OPEC) to wind down output cuts in place since the start of 2017.

Russia hinted it may gradually increase output, after having withheld supplies in concert with the OPEC producer cartel since 2017.

OPEC may decide in June to lift output to make up for reduced supply from crisis-hit Venezuela and Iran, which was stung by the U.S. decision to withdraw from a multilateral nuclear arms control deal, OPEC and oil industry sources told Reuters.

Brent crude LCOc1 futures stood at $78.68 a barrel, down 0.15 percent on Friday after a 1.27 percent loss the previous day. U.S. West Texas Intermediate (WTI) crude CLc1 futures were little changed at $70.66 per barrel. They lost 1.57 percent on Thursday.

Asian shares under pressure with Trump tempering Sino-U.S. trade optimism

Asian Stock Markets

Asian shares were mostly weak on Wednesday with investors cautious after U.S. President Donald Trump tempered optimism over progress made so far in trade talks between the world’s two largest economic powers. 

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.2 percent, while Japan's Nikkei .N225 lost as much as 1.4 percent to hit a 1-1/2-week low and the Shanghai Composite Index .SSEC retreated 0.6 percent.

On Wall Street, the S&P 500 .SPX shed 0.31 percent overnight, losing steam after hitting a two-month high.

Trump said on Tuesday he was not pleased with recent trade talks between the United States and China, souring the improved market sentiment following weekend comments from U.S. Treasury Secretary Steven Mnuchin that the “trade war” is “on hold”.

His remarks followed Beijing’s announcement that it would cut import tariffs for automobiles and car parts.

Trump also floated a plan to fine ZTE Corp (000063.SZ), (0763.HK) and shake up its management as his administration considered rolling back more severe penalties.

Further weighing on prices of risk assets, Trump also said there was a “substantial chance” his summit with North Korean leader Kim Jong Un will not take place as planned on June 12 amid concerns that Kim is resistant to giving up his nuclear weapons.

Investors fret Abe’s long-running cronyism scandal could attract more attention as the Ministry of Finance is due to release related documents on Thursday.

The cautious mood helped to underpin bonds. The 10-year U.S. Treasuries yield US10YT=RR stood at 3.054 percent, off Monday’s near seven-year high of 3.128 percent.

As lower U.S. yields sap the appetite for the dollar, the euro traded at $1.1754 EUR=, hovering above Monday's five-month low of $1.1717.

Against the yen the dollar slipped 0.4 percent to 110.47 JPY= from Monday's four-month high of 111.395.

The biggest mover in the currency market was the Turkish lira TRYTOM=D3, which fell more than two percent early on Wednesday to a record low of 4.8450 after rating agencies sounded the alarm on Tuesday over plans by President Tayyip Erdogan to tighten his grip on monetary policy.

The lira has fallen almost 15 percent so far this month.

In commodities, oil prices held firm near 3-1/2-year highs on potential supply concerns surrounding Venezuela and Iran.

U.S. West Texas Intermediate (WTI) crude CLc1 futures traded little changed at $72.01 a barrel, a 0.26 percent loss. They touched $72.83 a barrel, the highest since November 2014, on Tuesday.

Brent LCOc1 futures stood at $79.23 a barrel. Last week, the global benchmark topped $80 for the first time since November 2014.

Bitcoin BTC=BTSP dropped below $8,000 to five-week lows, entering a downtrend channel on technical charts. The cryptocurrency last traded at $7903.61, down 1.0 percent on the day.

Asian shares skid as dollar becomes strong and oil surges

Asian stock Markets

Asian shares skidded on Tuesday as a strong dollar sapped demand for emerging market assets while surging oil prices stoked concerns about a flare-up in inflation and faster U.S. interest rate increases. 

Japan’s Nikkei ended 0.2 percent lower and Australian shares fell 0.7 percent. Chinese stocks were in the red too with the blue-chip CSI300 off 0.5 percent.

Liquidity was relatively thin due to holidays in South Korea and Hong Kong.

Even though most major Asian markets edged lower, MSCI’s broadest index of Asia-Pacific shares outside Japan managed to eke out a small 0.17 percent gain.

The index is well below an all-time peak of 617.12 points hit in January, and is flat so far this year after a super-charged 33.5 percent gain in 2017.

Those concerns offset the boost to sentiment from overnight gains on Wall Street over the apparent reconciliation between the United States and China over import duties.

Analysts said investors in the region were worried about the growth outlook, with the U.S. Federal Reserve staying on its policy tightening path.


JPMorgan’s Shigemi said investors will now turn their focus to the next Fed meeting on June 13 where it is widely expected to raise rates for a second time this year.

A total of three hikes is almost fully priced-in by the market for 2018 although some investors expect the Fed to be more aggressive.

It was the fear of higher inflation and thus faster Fed rate rises that caused a bond market rout earlier this year, sending yields sharply higher and triggering a share market sell-off.

The dollar hovered near five-month highs against a basket of currencies, boosted by the U.S.-China trade optimism.

The dollar index was last down 0.1 percent at 93.56 from Monday’s top of 94.058.


The Japanese yen steadied near four-month lows at 111.05 per dollar, while sterling eased 0.1 percent to $1.3416 as investors prepared for key data that could determine whether the Bank of England raises rates in 2018.

Elsewhere, oil prices soared to their highest since 2014 after Venezuela’s presidential election heightened worries that the country’s oil output could fall further.

The market is also weighing the possibility of additional U.S. sanctions on the country.

U.S. crude added 26 to $72.50 per barrel and Brent rose 19 cents to $79.40.

The combination of higher oil and conciliatory actions on the US-China trade front boosted the Australian dollar, a liquid proxy for risk, to a one-month peak.

As the dollar strengthened, gold prices eased to stay near the lowest since late December at $1,289.68.

Asian shares slides as North Korea suspends talks, U.S. yields climb

Asian Stock Markets

Asian stock markets dipped on Wednesday after Pyongyang abruptly called off talks with Seoul, throwing a U.S.-North Korean summit into doubt, while surging bond yields revived worries about faster U.S. interest rate hikes that could curb global demand. 

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.2 percent as Pyongyang’s move appeared to mark a break in months of warming ties between North and South Korea and with Washington.

A cancellation of the June 12 summit in Singapore could see tensions on the Korean peninsula flare again even as investors worry about China-U.S. trade tensions and the sustainability of global economic growth.

Strong U.S. retail sales and factory data on Tuesday pushed the U.S. 10-year yield through a key level to hit 3.095 percent, its highest since July 2011, raising worries about higher borrowing costs for companies worldwide.

The 10-year yield US10Y=RR was last at 3.063 percent.

The rise in yields hurt U.S. share markets on concerns it would undercut stock valuations. [.N]

The Dow Jones Industrial Average .DJI fell 193.00 points, or 0.78 percent, to 24,706.41, the S&P 500 .SPX lost 18.68 points, or 0.68 percent, to 2,711.45 and the Nasdaq Composite .IXIC dropped 59.69 points, or 0.81 percent, to 7,351.63.

Elsewhere in Asia, Japan's Nikkei .N225 slid 0.4 percent, while South Korea's KOSPI .KS11 struggled for traction.

Stocks in China .SSEC dipped as traders awaited news from a second round of Sino-U.S. trade talks in Washington this week, with both sides believed to be still far apart. But Australian stocks bucked the trend and advanced 0.4 percent.

The yen largely shrugged off data that showed Japan’s economy shrank by 0.6 percent on an annualized basis in the January-March quarter, a sharper contraction than the median estimate of 0.2 percent and marking the end to eight straight quarters of expansion. 

High-yielding Asian currencies were particularly vulnerable to higher U.S. yields, which could prompt investors to shift funds out of emerging markets.

The Indonesian rupiah IDR= hit a 2-1/2-year lows while the Malaysian ringgit MYR= hit a four-month low.

The South Korean won KRW=KFTC was steadier but the country's bond yields KR10YT=RR rose to the highest level since late 2014.

In commodities markets, gold slightly rebounded after hitting a 4 1/2-month low the previous day on a strong dollar.

It stood at $1,294 per ounce XAU=, off Tuesday’s low of $1,289.30. [GOL/]

Global Stocks set for strongest week since March

Global Stock Markets

Shares rose worldwide on Friday, getting a boost from soft U.S. inflation numbers that helped soothe worries of faster Fed monetary tightening and pushed the dollar to its lowest for a week.

The MSCI All Country World Index MIWD00000PUS, which tracks shares in 47 countries, was up nearly 0.4 percent and was set for its strongest week since March 9. The dollar .DXY fell 0.2 percent against a basket of currencies, erasing this week’s gains in the wake of inflation data released on Thursday.

Oil prices steadied near 3-1/2-year highs as the prospect of new U.S. sanctions on Iran tightened the outlook for Middle East supply at a time when global crude production is only just keeping pace with rising demand.

The inflation numbers followed employment data last week that pointed to sluggish wage growth.
While the rally in stocks seemed to point to investor relief, analysts were split over whether the slowdown in inflation could lower the chances of the Fed increasing the number of rate hikes it has suggested will take place this year.

Federal Reserve Bank of St. Louis’ President James Bullard will make a speech on Friday, as will European Central Bank President Mario Draghi.

ADS Securities head of research Konstantinos Anthis said the case for two or three further U.S. rate hikes might be decided after the summer. Fed funds futures show a 93-percent chance of one next month.


The inflation data also flattened the U.S. Treasury yield curve further, with the gap between 5-year and 30-year bonds at its narrowest since 2007. Investors also bought southern European government bonds, taking advantage of a rise in yields on the back of Italian political concerns.

Italian, Spanish and Portuguese 10-year borrowing costs fell 2-3 basis points (bps), outpacing better-rated peers at the end of a week in which the increasing likelihood of an anti-establishment coalition taking power in Italy had hurt the euro zone’s lower-rated debt.

Italian 10-year yields were set for their biggest weekly rise since February. IT10YT=RR ES10YT=RR PT10YT=RR

European stocks, meanwhile, were set to seal their longest winning streak for more than three years as M&A activity stole the spotlight from the tail-end of a robust earnings season.

The pan-European STOXX 600 was flat, but set for its seventh straight week of gains - its longest winning streak since March 2015. Germany's DAX .GDAXI was down 0.3 percent and Britain's FTSE 100 .FTSE was down 0.1 percent. Wall Street was futures indicated a positive start to the session. ESc1

Asian markets were cheered by a further easing in tensions on the Korean Peninsula, after U.S. President Donald Trump said he would meet North Korean leader Kim Jong Un in Singapore on June 12 for talks on Pyongyang’s nuclear weapons programme.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.7 percent to near three-week highs while Japan's Nikkei .N225 climbed 1.2 percent.

With the situation around North Korea off the boil for now, political concerns are focused elsewhere as the United States and China continue skirmishing over trade and as tensions rise in the Middle East.

U.S. and Chinese officials will meet in Washington for a second round of trade talks next week, after apparently making little progress in discussions in Beijing this month.

In currency markets, the pound traded at $1.3573, rising half a percent above a four-month low of $1.3457 touched on Thursday after the Bank of England held interest rates.

In commodities markets, spot gold rose 0.3 percent to $1,324.66 an ounce. XAU=

U.S. crude futures CLc1 were up 0.2 percent at $71.46 a barrel. Brent crude futures LCOc1 fell 0.1 percent to $77.41 a barrel.

Meteoric Singapore Stock Comes Crashing Back to Earth

Asian Stock Markets

After a spectacular rise for two years, Singapore’s biggest technology company is suddenly returning to earth.

All eyes in the country’s financial community have been on Venture Corp., an electronics stock that more than tripled since April 2016 to become -- at one point -- a $6.5 billion firm. So meteoric was its advance that Venture became the only technology company listed on Singapore’s blue-chip 30-member Straits Times Index.

Venture Chief Executive Officer Wong Ngit Liong boosted his stake in 2016 -- for the first time in many years -- ahead of the stock rally. Beyond that, analysts say, he has largely kept quiet about Venture’s business.

The investors were impressed by Venture’s profit, which jumped amid the good times for technology companies last year. There were rumors of a big contract with Philip Morris International Inc. for its heat-not-burn tobacco device IQOS. (Venture hasn’t confirmed or denied a relationship with the cigarette giant.) Analysts also talked about how Venture was evolving into something bigger -- in areas from product design to research and development.

All the while, an air of mystery surrounded the company, partly because Wong gave little away about its customers. Then came the fall.

The first blow was Philip Morris’s earnings; the second, a short-seller attack. Venture is too exposed to the tobacco company, which had reported disappointing sales growth.

Venture has “consistently reported favourable financial performance every quarter,” and “keeps its ‘trade secrets’ very close to its heart” for the benefit of all stakeholders, the company said in a statement to the Singapore Exchange after market close on Tuesday.

During Venture’s first-quarter results briefing a day after the short report, CEO Wong told analysts to consider the source and intention of the note, while the company’s chief financial officer said the short sellers had “a clear hidden agenda.”

The company reported a 72 percent year-on-year increase in first-quarter net income, but its results fell short of analyst expectations because sales were almost flat. That, coupled with the short report and Philip Morris signaling that IQOS adoption in Japan has slowed, was enough to rattle the market.

At least seven brokerages lowered their price targets for the stock, according to data compiled by Bloomberg. Credit Suisse Group AG downgraded its rating to neutral from buy. And the shares plunged 33 percent over eight days.

Investors were jittery after local technology firms reported weak earnings, because they saw that as a signal that the sector was slowing down. But Hugh Young of Aberdeen Standard Investments says he’s not that worried about Venture’s decline. Young’s firm, which tends to be a long-term shareholder, has an almost 5 percent stake, according to data compiled by Bloomberg.

As if to back up the veteran investor, Venture staged a comeback this week with an 11 percent advance. That came, once again, after anonymous bloggers swayed the stock. This time, a group calling themselves the “True Valiant Warriors” came out in defense of the company. Their report and the blog it was published on have since been taken down. The company also stepped up its buybacks: Venture repurchased 109,000 shares from the market on Monday and 20,000 on Tuesday, according to filings to the Singapore Exchange. The shares rose as much as 3.7 percent on Wednesday.

Despite all the drama, Nicholas Teo, a trading strategist at KGI Securities (Singapore) Pte., sounds a note of caution about being too caught up in the stock’s movements. It’s important to look beyond the daily swings, he said.

Asia shares firm as Trump agrees to meet North Korean leader

Asia Stock Markets

Asian shares pared sharp early gains on Friday ahead of U.S. payrolls data which could hasten Federal Reserve rate hikes, and as some caution set in about the new entente between North Korean leader Kim Jong Un and U.S. President Donald Trump. 

Kim has committed to “denuclearization” and offered to hold the first-ever U.S.-North Korea summit, marking a potentially dramatic breakthrough in the North Korea nuclear standoff. 

Trump’s aides have been wary of North Korea’s diplomatic overtures because of its history of reneging on international commitments. 

The jubilation about the informal alliance did not last long as equity investors booked profits while futures for the S&P 500 and FTSE inched lower.

Japan’s Nikkei was last 0.3 percent firmer, having been up more than 2 percent at one stage. South Korean stocks eased too but were still 1 percent higher. 

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.6 percent, while Australia firmed 0.3 percent. 

The mood had already brightened a little after Trump pressed ahead with tariffs but offered conditional exemptions for Canada and Mexico, offering at least the hope that a full-blown global trade war could be averted.

The White House said other countries could apply for exemptions on the 25 percent tariff on steel imports and 10 percent for aluminum, but details were sparse on when they might be granted and under what terms. 

Several major trading partners have said they will respond with tariffs or direct action of their own.

Rising protectionism was a risk cited overnight by European Central Bank President Mario Draghi following the central bank’s latest policy meeting.

While the ECB did drop its easing bias as some expected, Draghi sounded in no rush to start unwinding stimulus.

The dovish tone was enough to see the euro fade back to $1.2310, having shed 0.8 percent on Thursday. That helped the U.S. dollar firm on a basket of currencies to 90.189.

The dollar gained 0.4 percent on the yen to 106.63, amid the recovery in risk appetite.

China to widen market access for foreign investors

Asian Stock Markets

China will sharply widen market access for foreign investors this year, with a focus on lowering investment barriers for the service sector and relaxing ownership limits in certain sectors, the state planner said on Tuesday.

The remarks, which echoed what a senior party official pledged in January in Davos, come as a reassurance for international investors who are eager to expand in China’s multi-trillion-dollar financial sector but have long been frustrated by regulations and the slow pace of market reforms.

 

U.S. and European business groups have urged China to grant more access and to level the playing field for their companies against domestic firms across a range of industries. 

Beijing has said it would raise the limit on foreign ownership in joint-venture firms involved in the futures, securities and funds markets, but it was unclear when the rules would be effective. 

China will strictly protect the intellectual property rights of foreign firms and ensure that domestic and foreign firms compete on an equal footing, said Ning Jizhe, vice head of the National Development and Reform Commission and head of the statistics bureau. 

The world’s second-largest economy is facing relatively large external pressure in attracting foreign direct investments (FDI) this year due to uncertainties in the global investment environment, according to the commerce ministry. 

FDI into China in January only rose 0.3 percent from a year earlier after declining 9.2 percent the previous month. 

China will achieve its economic growth targets this year through effort, said state planner head He Lifeng, adding that he expects exports and imports to maintain steady growth this year.

Asian markets turned negative againsteel as aluminium tariffs continues to feed concerns

Asian Stock Markets

Asian markets turned negative again on Monday as the fallout from Donald Trump’s steel and aluminium tariffs continues to feed concerns of a global trade war.

Equities went into a tailspin last week after the tycoon unveiled his plans for the controversial levies, and while US investors ended Friday on a slightly positive note, there is still the prospect of more volatility to come.

Trump ramped up his rhetoric at the weekend, tweeting that “Our friends and enemies have taken advantage of the US for many years”, before adding “Sorry, it’s time for a change!”

The move, part of the president’s “American First” protectionist drive, was met with fury across the world with officials from Beijing to Brussels raising concerns.

Hong Kong led losses, falling more than one percent, while Tokyo finished the morning session 0.7 percent lower.

Shanghai shed 0.2 percent, with eyes on the start of China’s annual rubber-stamp parliament, which kicked off its most significant meeting in a generation, preparing to offer Xi Jinping a lifetime mandate to rule the world’s number two economy.

Premier Li Keqiang set a 2018 economic growth target at “around 6.5 percent”, in line with expectations but lower than the 6.9 percent increase registered last year.

Sydney and Seoul each slipped 0.5 percent while Singapore was off 0.6 percent and Manila gave up 0.8 percent.

The dollar came under further pressure on worries about a trade war, with the safe haven yen extending last week’s gains, helped by comments from the head of the Bank of Japan last week suggesting crisis-era stimulus could be scaled back from next year.

Stephen Innes, head of Asia-Pacific trading at OANDA, said: “Trump is carrying the seeds of the dollar’s destruction.

“The economic fallout from trade duties would result in a toxic elixir of lower domestic growth and higher inflation, neither of which inspires investors confidence in the dollar.”

The euro also got support from news that German Chancellor Angela Merkel would form a new government, ending months of uncertainty in Europe’s biggest economy, though Italy was on course for a hung parliament after a weekend general election.

Asian stocks built on losses in the U.S., Yen Rises After Kuroda

Asian Stock markets

Asian stocks built on losses in the U.S. on rekindled concerns about what a potential trade war and a more hawkish Federal Reserve could do to global economic growth. 

The yen jumped after Bank of Japan Governor Haruhiko Kuroda discussed the timing of a possible exit from its stimulus policy.

Apan bore the brunt of declines, with the Topix Index extending losses after Kuroda’s comments.

Shares in Hong Kong, China, Australia and South Korea were also weaker after U.S. stocks posted a third day of declines.


Treasuries retreated and German bunds climbed.

The dollar steadied.

The Cboe Volatility Index is up 35 percent this week as Fed chair Jerome Powell opened the door to speculation that the central bank may quicken the pace of monetary tightening, a move investors worry could derail economic growth.

In his Senate testimony Thursday, he called for gradual interest rate hikes and said the economy wasn’t overheating.

Elsewhere, oil steadied after a decline on concerns about increasing U.S. crude production.

Bitcoin climbed above $11,000 on course to post a 12 percent increase this week.

Terminal users can read more in our markets blog.

Stocks

• The MSCI Asia Pacific Index fell 0.9 percent as of 4:07 p.m. Tokyo time.
• Topix index declined 1.8 percent.
• Hong Kong’s Hang Seng Index declined 1.6 percent.
• Kospi index fell 1 percent.
• Australia’s S&P/ASX 200 Index fell 0.7 percent.
• Futures on the S&P 500 Index rose less than 0.05 percent.

Bonds

• The yield on 10-year Treasuries rose one basis point to 2.82 percent.
• Japan’s 10-year yield climbed two basis points to 0.063 percent.
• Australia’s 10-year yield fell two basis points to 2.737 percent.

Asian Stock markets extended Wall Street’s overnight, Trump sparks global trade war fears

Asia Stock markets

Stock markets in Asia extended Wall Street’s overnight rout on Friday, with investors spooked by the specter of a global trade war after President Donald Trump said the United States would impose hefty tariffs on imported steel and aluminum. 

Trump said duties of 25 percent on steel and 10 percent on aluminum would be formally announced next week, sparking concerns of retaliatory moves from major trade partners such as China, Europe and neighboring Canada. 

European shares look set to fall, with spreadbetters expecting Germany’s Dax to shed 0.9 percent to approach last month’s five-month low, France’s Cac to drop 0.7 percent and Britain’s FTSE 0.6 percent. 

MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.9 percent, while Japan’s Nikkei tumbled 2.5 percent. 

For the week, they are down 2.1 percent and 3.3 percent respectively. 

Shares in Asian steelmakers slid, with South Korea’s Posco falling 3.3 percent and Japan’s Nippon Steel down 3.8 percent. 

Toyota Motor shares were down 2.4 percent after the automaker said the planned tariffs would substantially raise the production costs and therefore prices of cars and trucks sold in America. 

In China, Shanghai composite index dropped 0.6 percent. 

On Wall Street, the S&P 500 lost 36.16 points, or 1.33 percent, to 2,677.67 on Thursday, coming a day after investors sold off heavily on worries the Federal Reserve might increase rates more than expected this year. 

Trump’s latest trade salvo comes after Washington slapped steep tariffs on imports of solar panels and washing machines in January, prompting China to launch an anti-dumping and anti-subsidy investigation into imports of sorghum from the United States. 

The anxiety over tit-for-tat moves was underscored by Canada’s quick response, with officials in Ottawa saying they will retaliate against any U.S. tariffs on steel and aluminum products. 

Markets are already fretting about the tempo of U.S. rate hikes this year, and now added to that is the fear escalating trade protectionism could dent global growth and corporate earnings - key drivers of last year’s rally in equities . 

Concerns over a harmful trade war eclipsed upbeat U.S. economic data published on Thursday, including a rise in the manufacturing index to 14-year highs and another showing the number of Americans filing for unemployment benefits hitting a 48-year low. 

U.S. Treasury yields fell as the risk of a trade war appeared to push aside considerations of inflation, a major theme that spooked global financial markets earlier this year. 

The 10-year U.S. Treasuries yield fell to 2.811 percent, hitting its lowest level in three weeks and further extending the distance from its four-year peak of 2.957 percent touched on Feb 21. 

Some say, on the other hand, markets may be over-reacting. 

In the currency market, the dollar’s rebound following the bullish comments on the U.S. economy from new Federal Reserve Chair Jerome Powell on Tuesday lost momentum. 

The euro jumped back to $1.2271, after having hit a seven-week low of $1.21545 on Thursday. 

The yen got an additional boost when Bank of Japan Governor Haruhiko Kuroda said he would mull an exit from the BOJ’s current stimulus regime if the central bank’s 2 percent inflation target is achieved in 2019. 

The dollar dropped 0.4 percent to 105.79 yen, edging back towards its 15-month low of 105.545 set on Feb 16. 

The dollar index is down 2.1 percent this year, dogged by suspicions that the Trump administration prefers a weaker dollar to help narrow the United States’s yawning trade deficit. 

Worries that Trump’s big tax cuts and spending plans will ramp up fiscal deficits to the extent that they undermine confidence in U.S. debt have also hurt the greenback. 

Oil prices were also under pressure, having fallen more than 1 percent the previous day on trade friction fears. 

U.S. crude was little changed in late Asian trade at $60.93 per barrel, having fallen to two-week low of $60.18 on Thursday. It is down 3.7 percent so far this week. 

Brent futures traded at $63.85 per barrel after having hit a two-week low of $63.19.

Asian stocks slide, as the dollar hits six-week high

Asian Stock Markets

Asian stocks were mostly lower on Thursday after Wall Street marked its worst monthly performance in two years as hawkish-sounding comments from new Federal Reserve Chair Jerome Powell reverberated across the broader risk asset markets. 

Spreadbetters expected European stocks to open lower, with Britain’s FTSE falling 0.7 percent, Germany’s DAX slipping 0.8 percent and France’s CAC retreating 0.75 percent.

Investors have been on edge in recent weeks amid concerns that rising interest rates in advanced economies, led by the United States, could sap global growth. 

Powell, in his first public appearance as head of the Fed, vowed at a congressional hearing on Tuesday (U.S. time) to prevent the economy from overheating while sticking with a plan to gradually raise interest rates. 

Those comments rekindled speculation in equity markets over U.S. monetary tightening this year happening faster than expected, feeding concerns that higher borrowing costs could crimp corporate activity and cool economic growth. 

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.5 percent and headed for its third day of losses. 

Chinese shares bucked the trend and edged up after a private survey showed growth in China’s manufacturing sector picking up to a six-month high. Shanghai shares were 0.15 percent higher. 

Australian stocks fell 0.7 percent, South Korea’s KOSPI shed 1.2 percent and Japan’s Nikkei dropped 1.55 percent. 

The losses in Asia came amid a broad selloff on Wall Street, where the Dow and S&P 500 capped their worst months since January 2016 overnight after suffering sharp losses early in February. 

The Dow scaled an all-time high late in January, before falling about 12 percent from that peak at the start of February as a rise in U.S. yields to multi-year highs unnerved Wall Street. 

It went on to recover a bulk of those losses, but the rebound stalled in the wake of Powell’s comments. 

The Fed’s last round of economic projections in December pointed to three rate increases this year, but Powell’s remarks prompted investors to wager on four rate rises instead.

DOLLAR COMEBACK CONTINUES

The dollar, which retreated to three-year lows last month, has taken heart from the Fed chair’s comments. 

The dollar index against a basket of six major currencies rose to 90.744, its highest since Jan. 19 and last stood at 90.703. 

The index has managed to claw back from the three-year trough of 88.253 set in mid-February when fears of a ballooning U.S. budget deficit and lingering worries that Washington could pursue a weak dollar policy took a toll. 

U.S. crude oil futures stood little changed at $61.65 per barrel after sliding more than 2 percent overnight. Brent crude lost 0.1 percent to $64.66 per barrel. 

A stronger greenback tends to weigh on commodities including crude as it makes them more expensive for non-U.S. buyers of dollar-denominated products. 

The euro was steady at $1.2192 and in close reach of a 1-1/2-month low of $1.2188 plumbed the previous day. 

The common currency came under pressure after data on Wednesday showed euro zone inflation slowing to a 14-month low and underscored the European Central Bank’s caution over removing its monetary stimulus. 

The dollar was little changed at 106.750 yen , having slipped from the week’s peak of 107.680 as broader risk aversion favoured its Japanese peer. 

The Australian dollar was down 0.45 percent at $0.7728 after brushing $0.7717 , its lowest since late December. 

Long-term U.S. Treasury yields stood little changed at 2.864 percent after declining about 3 basis points overnight on month-end purchases by investors rebalancing their portfolios and weaker Wall Street shares.

Penny Stocks spark gold rush in Philippines

Asian Stock Markets

There’s a gold rush in Philippine telecom minnows and everybody’s invited. For now.

President Rodrigo Duterte’s decision to award a new telecommunications license has sparked a frenzy as speculators bid up the prices of once-forgotten penny stocks which may benefit from the shakeup of the sector’s current duopoly of PLDT Inc. and Globe Telecom Inc.

NOW Corp.’s market value has surged almost 400 percent so far this year on wagers the broadband service provider will be part of a new consortium to challenge the incumbents.

Its market value of about 21 billion pesos ($403 million) is 8,400 times the 2.5 million pesos in net income it posted in 2016. Earlier this month, it became more valuable than GMA Network Inc., the nation’s second-largest broadcaster, which earned 3.6 billion pesos during the same period.

EasyCall Communications Philippines Inc., a former 1990s provider of paging services that’s seeking to build a wireless broadband network, has risen over 1400 percent since the end of November.

Transpacific Broadband Group International Inc., a satellite station operator, is up more than 200 percent over the same period. The benchmark Philippine Stock Exchange Index has eked out a miserly 3 percent gain in comparison.

The ongoing interest was evident in trading Wednesday. EasyCall was up 49 percent and Transpacific 13 percent as of 11:39 a.m. in Manila. The benchmark stock index was down 1.2 percent.

The Philippines will bid out a new telecom license in the first half of 2018, a process set in motion by Duterte’s invitation in November to Premier Li Keqiang for a Chinese company to invest in the sector and improve services.

The proposal sparked investor interest in potential domestic partners for any Chinese bidders, and NOW, EasyCall and Transpacific Broadband are among the 10 biggest gainers this year in the all-share index.

Bets that they can leverage their franchises, existing operations and listed status to potential overseas bidders will likely continue until the bidding, according to Jonathan Ravelas, chief market strategist at BDO Unibank Inc.

Golden Haven Inc., a builder of memorial parks that expanded into mass housing, has seen its shares surge over 1,300 percent this year on speculation its billionaire owner Manuel Villar will use the company to list his telecom venture that will bid for the frequencies the government will sell. Even Villar’s Starmalls Inc., a shopping mall builder, has risen over 170 percent in 2018 on the same speculation.

However, to some in the market, the rally has gone too far and there is a growing risk of a pullback. Rachelle Cruz, an analyst at AP Securities Inc. in Manila, is cautious on the sector given the speculative nature of the moves, even for shareholders of the company which gets the license.

Gains in the stocks will moderate as the bidding nears, with the realization that the winner can’t build the business overnight, said Paul Michael Angelo, an analyst at Regina Capital Development Corp.

As for the companies themselves, they aren’t convinced by the naysayers, preferring to highlight the logic they see behind the moves.

Asian shares held firm near three-week highs

Asian Stock Markets

Asian shares held firm near three-week highs on Tuesday as U.S. borrowing costs eased ahead of Federal Reserve Chairman Jerome Powell’s awaited first congressional testimony later in the day.  

Japan’s Nikkei rose 1.1 percent to three-week highs while MSCI’s broadest index of Asia-Pacific shares outside Japan also hit a three-week high before giving up gains on profit-taking in Chinese shares. 

On Wall Street, the S&P 500 advanced 1.18 percent on Monday helped by a fall in U.S. bond yields.[.N] 

The 10-year U.S. Treasuries yield eased to 2.864 percent, dropping further from its four-year peak of 2.957 percent touched on Feb. 21, driven by month-end buying as well as position adjustments ahead of Powell’s testimony. 

Powell’s debut appearance is seen as critical for financial markets at a time when many investors are nervous about the Fed’s policy normalization following years of stimulus after the financial crisis almost a decade ago. 

Many investors expect the Fed to raise interest rates three times this year, with some pundits predicting four, if U.S. inflation starts to take off, especially as growth is set to get another boost from the Trump administration’s tax cuts and spending plans. 

Yet, there are worries higher dollar bond yields could prompt investors to shift funds to bonds from riskier assets, especially when the valuation of the world’s stocks are quite expensive even after their sell-off earlier this month. 

The two-year U.S. Treasuries yield was 2.226 percent, well above the dividend yield of the S&P 500, which stood at 1.88 percent. 

A rise in dollar interest rates could also bode ill for potential borrowers, including U.S. home buyers and many companies that have expanded borrowing for years to take advantage of low dollar funding costs. 

MSCI’s gauge of equity market performance in 47 countries, which gained 0.8 percent on Monday, rose another 0.1 percent on Tuesday, taking it to a new three-week high. 

Still, it is down 2.2 percent so far this month, suggesting its record 15-month winning streak that began in November 2016 is at risk. 

In the currency markets, the euro traded at $1.2327, up 0.1 percent in Asia but off its three-year high of $1.2556 hit earlier this month. 

The dollar traded at 106.85 yen, stabilizing for now above its 15-month low of 105.545 set on Feb 16.

Fed funds rate futures were almost fully pricing in a rate hike at the Fed’s next policy meeting on March 20-21.

Asian shares mostly firmer, dollar loses early edge

Asian Stock Markets

Asian shares made guarded gains on Monday as investors braced for an event-packed week headlined by U.S. inflation data and the first House testimony by the new head of the Federal Reserve.

Spread betters also pointed to a stronger start for Europe and FTSE futures were already 0.5 percent higher.

But sentiment was fragile, with the dollar reversing its early rise and safe-haven bonds firming as E-Mini futures for the S&P 500 turned flat.

MSCI’s broadest index of Asia-Pacific shares outside Japan crept up 0.6 percent, with most bourses in the green.

Japan’s Nikkei led with an increase of 1.3 percent, while Chinese blue chips added 0.7 percent.

China’s ruling Communist Party on Sunday set the stage for President Xi Jinping to stay in office indefinitely, with a proposal to remove a constitutional clause limiting presidential service to just two terms in office.

Investors initially took heart from Friday’s rally on Wall Street which saw the VIX volatility index end at 16.49 percent, far below the 50 percent peak touched at the height of market turmoil in early February.

Trump tariffs on steel would hit China -- and the entire global trading system

Asian Stock Markets

If President Trump decides to impose steep tariffs on steel, it would be a direct shot at Beijing.

But the list of countries that would be affected doesn't end with China. Limiting or taxing steel imports could also hit Canada, Brazil, South Korea, and Russia — and the implications could ripple throughout the entire trading system. 

On Trump's desk are a broad range of trade options meant to bolster the domestic steel industry. The recommendations sent from the Commerce Department include across-the-board tariffs, targeting select nations with even higher tariffs and capping how much steel comes into the country. 

The president has until April to choose any one of these options, a combination of them or entirely different trade actions. He has a similar set of recommendations on aluminum

In the past, the president's rhetoric on steel has focused on China. Since starting his run for office, Trump has laid into China for sending excess cheap steel into the global market, which he says makes it impossible for American steel companies to compete. 

It's true that China, the world's top exporter of steel, is a major source of a global supply glut that has driven down prices. American and European steelmakers have made complaints echoing Trump's criticism for years.

However, China is not the top country from which the United States imports steel. In fact, it's not even in the top 10. 

Due to the trade penalties the United States has slapped on Chinese steel during past administrations, China sends much less steel to the U.S. than it used to. 

The United States imports most of its steel — 16% — from Canada. It imports 13% from Brazil, 10% from South Korea, 9% from Mexico and 9% from Russia, according to a Department of Commerce report from December 2017.

That means that a 24% tariff on steel imports from all countries — one of the proposals on the table — would also have a major impact across the globe.

Trade experts say that if Trump goes that route, even U.S. allies like Canada, South Korea, Mexico could be willing to retaliate, sticking tariffs of their own on U.S. exports like agricultural products, or picking non-U.S. goods — like Airbus planes over Boeing models. 

China would still feel the pain from protective U.S. measures. A lot of China's steel makes its way to the United States indirectly.

Even if Trump does not decide to enact an across-the-board tariff, the other options he's considering will also resonate globally.

That's because the Commerce Department is advising Trump to take action under a little known trade law from 1962.

If Trump invokes Section 232 of the Trade Expansion Act, as is recommended, that means he believes steel imports are hurting national security.

Experts say that rationale is flimsy, and isn't likely to hold under the rules established by the World Trade Organization.

In fact, it could be deemed such a flagrant violation of the rules that it could open the door for tit-for-tat responses from other countries, according to Matt Gold, an international trade law expert at Fordham University. 

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.