Asian shares stumble as China extends declines amid trade tensions

Asian Stock Markets

Asian stocks traded mostly lower on Tuesday, with greater China markets extending their declines as investor worries over Beijing's trade relations with the U.S. soured sentiment in the region.

China markets pulled back, extending the last session's sharp declines. The Shanghai composite sank 1.27 percent after touching two-year lows in the last session and the Shenzhen composite pulled back by 1.36 percent.

Hong Kong's Hang Seng Index plunged 3.08 percent as markets there reopened for trade after a holiday, with the energy and services sectors leading losses. Heavily weighted financials also slumped, with HSBC down 2.79 percent, while technology blue chip Tencent dropped 2.74 percent.

Asian stocks traded mostly lower on Tuesday, with greater China markets extending their declines as investor worries over Beijing's trade relations with the U.S. soured sentiment in the region.

China markets pulled back, extending the last session's sharp declines. The Shanghai composite sank 1.27 percent after touching two-year lows in the last session and the Shenzhen composite pulled back by 1.36 percent.

Hong Kong's Hang Seng Index plunged 3.08 percent as markets there reopened for trade after a holiday, with the energy and services sectors leading losses. Heavily weighted financials also slumped, with HSBC down 2.79 percent, while technology blue chip Tencent dropped 2.74 percent.
Symbol
   
Elsewhere, Japan's Nikkei 225 turned lower, declining 0.65 percent after earlier retracing some of the sharp declines seen in the overnight session. Airlines and oil producers clung to gains, while most other sectors eased.

In South Korea, the Kospi edged down by 0.37 percent. Manufacturers and technology plays were mixed, with Samsung Electronics gaining 0.99 percent while steelmaker Posco lost 2.06 percent. The S&P/ASX 200, however, bucked the broader trend to rise 0.51 percent.

Meanwhile, MSCI's index of stocks in Asia Pacific outside of Japan sank 1.22 percent in Asia morning trade.

Investors were cautious as markets continued to watch developments on the trade front. A looming July 6 deadline is set to see the U.S. impose a 25 percent tariff on $34 billion worth of Chinese goods from more than 800 product categories. China has also announced that it will retaliate with duties on the same value of U.S. products.

"While we still think that a full-blown trade war is unlikely, the harsh rhetoric and punitive measures have reached a point that warrants serious consideration of such eventualities," Tamur Baig, chief economist at DBS Bank, said in a note. He added that the U.S. would likely be hurt more than China if a trade war ensues, given how China's retaliation can be on multiple fronts and the U.S. is involved in more than one trade spat.

The U.S. is also engaged in disputes on trade issues with other key trading partners, including Canada and the European Union. The U.S. could face tariffs from the European Union on as much as $300 billion in U.S. goods if the Trump administration proceeds with imposing duties on European cars, the Financial Times reported.

Markets in Europe and Asia closed lower in the previous session amid the concerns over trade, with the pan-European Stoxx 600 declining 0.84 percent. Asian stock indexes saw steeper losses as China markets resumed their slide after getting some reprieve at the end of last week, with the Shanghai composite dropping 2.52 percent on Monday.

Amid the market moves ahead of that July 6 deadline for tariffs, U.S. Commerce Secretary Wilbur Ross told CNBC there was no "bright line level of the stock market" that would change U.S. President Donald Trump's mind on trade policy.

Those jitters also overshadowed the moderate gains made on Wall Street overnight, with U.S. stocks closing in positive territory after dipping early in the overnight session on trade concerns. The Dow Jones Industrial Average rose 0.15 percent, or 35.77 points, to close at 24,307.18.

Investor jitters over trade concerns, meanwhile, supported the greenback. The dollar index, which tracks the dollar against a basket of currencies, traded at 94.925 at 11:24 a.m. HK/SIN after rising above the 95 handle in the overnight session. Against the yen, the dollar traded at 110.86.

Asian Stocks Mixed; Oil Extends Slide

Asian Stock Markets

Asian stocks struggled for traction Monday with energy shares tumbling after oil extended its biggest drop in about a year. The euro rallied after Italy’s president rejected a candidate for finance minister who’s been skeptical of the single currency.

Benchmarks dipped in Tokyo and Australia. South Korean stocks rose, as did U.S. futures, after President Donald Trump appeared to confirm that his June summit with North Korea’s Kim Jong Un was back on.

Hong Kong stocks advanced. Euro Stoxx 50 futures gained.

 The MSCI Asia Pacific Energy Index had the biggest decline after a Saudi minister said petroleum supply would likely rise in the second half. Oil slid further below $70 a barrel while the dollar slipped against most major peers.

Trading may be subdued round the world by U.S. and U.K. holidays Monday.

Investors turn their attention to the economy this week with readings on European inflation, Chinese manufacturing and Friday’s U.S. jobs report, the last before Federal Reserve policy makers meet in June. Italian assets will be in focus after that country sank deeper into political uncertainty, with populist leaders failing in their attempt to form a government.

Elsewhere, the Indonesian rupiah climbed amid speculation of another interest rate hike by the central bank, while the nation’s stocks and sovereign bonds also rallied, with the 10-year yield sliding about 20 basis points.

S&P/ASX 200 Index fell 0.5 percent.
Kospi index rose 0.8 percent.
Hang Seng Index gained 0.7 percent. Shanghai Composite Index fluctuated.
Futures on the S&P 500 advanced 0.5 percent.
Euro Stoxx 50 futures climbed 0.5 percent as of 8:05 a.m. in Frankfurt.
MSCI Asia Pacific Index rose 0.1 percent.
The Japanese yen fell 0.2 percent to 109.60 per dollar.
The rupiah gained 0.9 percent to 13,990 per dollar.
West Texas Intermediate crude plunged 2.4 percent to $66.24 a barrel after tumbling 4 percent on Friday.

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 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 stocks rose after Mnuchin says Sino-U.S. trade war 'on hold'

Asian Stock Markets

Stocks rose on Monday after U.S. Treasury Secretary Steven Mnuchin declared the U.S.-China trade war “on hold” following their agreement to suspend the tariff threats that roiled global markets this year.

U.S. S&P mini futures ESc1 rose 0.60 percent in Asian trade on Monday. European stocks are expected to follow suit, with spread-betters seeing a higher opening of 0.7 percent in Britain's FTSE .FTSE and 0.4 percent in Germany's DAX .GDAXI and France's CAC .FCHI.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS advanced 0.45 percent, led by strong gains in greater China. Hong Kong's Hang Seng .HSI was up 1.3 percent, Taiwanese shares .TWII 1.3 percent.

The Shanghai Shenzen CSI 300 .CSI300 gained 0.7 percent, hitting five-week highs.

Japan's Nikkei .N225 gained 0.4 percent.

Mnuchin and U.S. President Donald Trump’s top economic adviser, Larry Kudlow, said the agreement reached by Chinese and American negotiators on Saturday set up a framework for addressing trade imbalances in the future.

As safe-haven demand for debt fell, U.S. bond prices were under pressure, keeping their yields not far from last week’s peaks.

The 10-year Treasuries yield stood at 3.076 percent US10YT=RR, near a seven-year high of 3.128 percent hit on Friday.

In the currency market, higher U.S. yields helped to strengthen the dollar against a wide range of currencies.

The euro dipped 0.2 percent to $1.1748 EUR=, hitting its lowest level since mid-December.

The common currency was also hit after two anti-establishment parties pledged to increase spending in a deal to form a new coalition government in Italy.

The dollar maintained an uptrend against the yen, rising 0.5 percent to 110.29 yen, JPY=, a high last seen in January.

Some emerging market currencies remained fragile. The Indonesian rupiah IDR= dropped 0.3 percent to 2 1/2-year lows and the Turkish lira TRYTOM=D3 slipped 0.7 percent to record lows.

Oil prices held firm near 3-1/2-year highs, drawing support from easing trade tensions between the world’s two biggest economies.

The market is keeping an eye on Venezuela, where President Nicolas Maduro won a new six-year term, an outcome that could trigger additional sanctions from the United States and more censure from the European Union and Latin America.

Oil prices have been supported by plummeting Venezuelan production, in addition to a solid global demand and supply concerns stemming from tensions in the Middle East.

U.S. crude futures rose 0.8 percent to CLc1 $71.83 per barrel, near last week’s 3 1/2-year high of $72.30 while Brent crude futures LCOc1 notched up 0.8 percent to $79.10 per barrel. It had risen to $80.50 last week, its highest since November 2014.

Venezuelan debt is barely traded in Asia but bonds issued by Venezuelan oil company PDVSA maturing in 2020 VE151299784= were quoted at a yield around 19.4 percent, a tad above last week’s low around 18.4 percent.

Elsewhere U.S. soybeans Sv1 jumped 2 percent on the Sino-U.S. agreement to drop tariff threats. In April, China proposed a 25 percent duty on U.S. soybeans as part of its response to Washington’s plans to impose tariffs on a range of Chinese products.

Asian stocks steadies amid caution over U.S.-China trade talks

Asian Stock Markets

Asian stocks were steady on Friday amid caution over developments in U.S.-China trade negotiations, while the dollar perched near a five-month peak after the benchmark U.S. Treasury yield hit its highest in seven years. 

Spreadbetters expected European stocks to open mixed, with Britain’s FTSE dipping 0.1 percent, Germany’s DAX rising 0.13 percent and France’s CAC little changed.

MSCI’s broadest index of Asia-Pacific shares outside Japan was little changed. The index was headed for a 1 percent loss this week.

Hong Kong’s Hang Seng rose 0.17 percent and Shanghai climbed 0.3 percent as some investors bet Beijing and Washington will reach a deal in the latest round of trade talks. [.SS]

Japan’s Nikkei rose 0.35 percent, South Korea’s KOSPI was up 0.3 percent and Australian stocks dipped 0.2 percent.

Wall Street ended slightly lower on Thursday as investors grappled with U.S.-China trade tensions after U.S. President Donald Trump said that China “has become very spoiled on trade”.

But helping ease some of the tension, Beijing has offered Trump a package of proposed purchases of American goods and other measures aimed at reducing the U.S. trade deficit with China by some $200 billion a year, U.S. officials familiar with the proposal said.

A second round of talks between senior Trump administration officials and their Chinese counterparts started on Thursday, focused on cutting China’s U.S. trade surplus and improving intellectual property protections.



In currencies, the dollar index against a basket of six major currencies was steady at 93.471 after rising to a five-month peak of 93.632 on Thursday.

The index has gained about 1 percent this week, buoyed by the surge in U.S. Treasury yields, with the 10-year U.S. Treasury note yield hitting a seven-year peak of 3.128 percent.

The euro was up 0.1 percent at $1.1805, but not far off a five-month trough of $1.1763 brushed on Wednesday. The currency has fallen nearly 1.2 percent this week, largely pressured by Italian political uncertainty.

Reports this week that Italian populist parties likely to form the country’s next government may ask the European Central Bank for debt forgiveness have raised concerns about Italy abandoning fiscal discipline.

The dollar extended an overnight rally and rose to 111.005 yen, its highest since late January. The greenback has gained about 1.4 percent against its Japanese peer this week.

Emerging market currencies have also lost ground against the dollar this week as the rise in U.S. yields showed little signs of slowing.

The Turkish lira fell to a record low against the dollar this week, the Brazilian real plumbed a two-year low while Mexico’s peso has shed more than 5 percent this month.

A retreat by Indonesia’s rupiah to a 2-1/2-year low prompted the central bank to tighten monetary policy on Thursday for the first time since 2014 to support the currency.

In commodities, Brent crude oil futures were 16 cents higher at $79.46 a barrel after rising to $80.50 on Thursday, their highest since November 2014.

Brent has risen 3 percent this week and is headed for a sixth week of gains.

A rapid slide in oil supply from Venezuela, concern that U.S. sanctions will disrupt exports from Iran, and falling global inventories have all combined to push oil prices up nearly 20 percent in 2018. [O/R]

Inflation concerns, strong U.S. economic indicators and worries over increasing debt supply have pushed Treasury yields higher this week.

Asian stocks rose with energy shares lead the way

Asian Stock Markets

Asia stocks gain as crude oil extends rally on Iran woes.  

Asian stocks rose on Thursday, with energy shares leading the way as crude oil prices bolted higher after U.S. President Donald Trump’s decision to pull out of a nuclear deal with Iran.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS advanced 0.6 percent, while Japan's Nikkei .N225 climbed 0.3 percent. South Korea's KOSPI .KS11 rose 0.5 percent and Shanghai SSEC was 0.2 percent higher.

Brent crude futures LCOc1 rose 0.8 percent to $77.82 a barrel, the highest since November 2014 and building on gains of about 3 percent on Wednesday. U.S. light crude futures CLc1 were up 0.6 percent at $71.69.[O/R]

Energy shares soared as crude oil prices reached 3-1/2-year highs, with investors betting the U.S. withdrawal from a nuclear agreement with Iran would increase tensions in the Middle East and curtail oil supply.

Overnight, the Dow .DJI gained 0.75 percent and the S&P 500 .SPX climbed nearly 1 percent, with the S&P energy index .SPNY rallying 2 percent.[.N]

Rising oil prices in turn pushed up U.S. Treasury yields by fanning inflation concerns. The 10-year Treasury note yield rose to a two-week high above the 3 percent threshold before pulling back to 2.982 percent US10YT=RR.

Shored up by higher yields, the dollar climbed to a 4-1/2-month high of 93.416 against a basket of six major currencies overnight .DXY. The dollar index was last at 92.956.

The New Zealand dollar retreated to a five-month low of $0.6915 NZD=D4 after the Reserve Bank of New Zealand (RBNZ) wrongfooted hawks. It kept interest rates steady as expected, but said its next move might be a cut or a hike.

The euro crawled back to $1.1871 EUR= after slipping overnight to $1.1823, its lowest since late December. The dollar was steady at 109.690 yen JPY= after brushing an eight-day peak of 109.930.

Investors in emerging markets, already facing financial uncertainty in countries such as Argentina and Turkey, received another jolt after a stunning election upset in Malaysia. 

Moody’s ratings agency said the country was now in uncharted territory after an alliance of opposition parties led by former prime minister Mahathir Mohamad shocked the ruling coalition.

Over the past day the Malaysian ringgit slid nearly 3 percent in the one-month non-deliverable forward market and the cost to insure against the country’s debt default has risen.

Special public holidays were declared for Thursday and Friday following the elections. But, highlighting investor worries, the U.S.-traded iShares MSCI Malaysia ETF (EWM) plunged 6 percent overnight to a one-year low.

Asian stocks climbs after U.S. tech shares bounce

Asian Stock Markets

Asian shares rose on Friday after U.S. equities were buoyed by a rebound in technology stocks, while markets in Seoul were underpinned by optimism as leaders of North and South Korea held their first summit in over a decade. 

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.8 percent, but still looked set to shed 0.9 percent for the week.

European stocks are expected to open higher, according to financial spreadbetters, with Britain's FTSE 100 .FTSE seen opening 5 points up, Germany's DAX .GDAX is expected to gain 57 points while France's CAC FCHI is seen rising 13 points.

South Korea’s KOSPI briefly rose more than 1 percent to a one-month high, helped by hopes that the summit could ease tensions over Pyongyang’s nuclear weapons programme and pave the way for the North and South to end their decades-long conflict.

South Korean equities later pared their gains to 0.8 percent .KS11, while the South Korean won KRW=KFTC rose more than 0.5 percent against the dollar in onshore trade.


Japan's Nikkei share average rose 0.7 percent .N225 and touched a two-month peak at one point, getting a boost as chip-related firms rallied after brisk earnings forecasts from Advantest (6857.T) and Kyocera. (6971.T)

The firmer tone of Asian equities came after each of Wall Street’s major indexes rose 1 percent or more on Thursday, boosted by solid earnings results and a rebound in technology stocks.

Amazon.com Inc (AMZN.O) shares jumped more than 6 percent in after-market trading after the online retailer reported a 43 percent surge in first-quarter revenue.

Facebook (FB.O) surged 9.1 percent on Thursday after posting an impressive earnings beat, which appeared to calm worries about the fallout from its use of consumer data.

The U.S. 10-year Treasury yield US10YT=RR fell more than 1 basis point in Asia to about 2.975 percent, down from a four-year high of 3.035 percent set earlier in the week.

The U.S. 10-year yield had edged lower on Thursday as buyers emerged in the wake of a sell-off fuelled by worries over growing U.S. debt issuance and rising costs.

The euro languished near a 3-1/2-month low, having taken a hit after the European Central Bank on Thursday struck a dovish tone as it kept interest rates unchanged.

ECB chief Mario Draghi acknowledged evidence of a “pull-back” from exceptional growth readings seen around the turn of the year, although the central bank sought to bolster expectations for a gradual withdrawal of its monetary stimulus.

The euro held steady at $1.2107 EUR=. On Thursday it hit a trough of $1.20965, its lowest level since Jan. 12.

The yen showed little reaction after the Bank of Japan kept its monetary policy steady as widely expected.

Against the yen, the dollar held steady at 109.28 yen JPY=, having backed off slightly from a 2-1/2-month peak of 109.49 yen struck on Thursday.

Oil prices edged lower on Friday but Brent largely held gains from the previous session amid concerns that Iran may face renewed sanctions, choking off supply.

Global benchmark Brent crude futures LCOc1 fell 0.4 percent to $74.47 a barrel, after rising 1 percent on Thursday.

Asian stocks supported by corporate earnings that quell concerns about the surge in U.S. bond yields.

Asian stocks were supported on Thursday by robust corporate earnings that helped Wall Street quell concerns about the surge in U.S. bond yields. However, sagging Chinese shares limited the upside potential of the market. 

Spreadbetters expected European stocks to open higher off the back of firm U.S. stocks, pointing to a rise in Britain’s FTSE of 0.1 percent, an increase in Germany’s DAX of 0.4 percent and in France’s CAC of 0.4 percent.

The dollar hovered near 3-1/2-month highs against a basket of currencies, supported by the rise in U.S. long-term debt yields to a four-year peak.

South Korea’s KOSPI climbed 1.3 percent, with tech shares buoyed by news of a record quarterly profit from Samsung Electronics.

The region’s other gainers included Japan’s Nikkei, which rose 0.5 percent and Thai and Malaysian stocks.

MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.15 percent, as weaker Chinese stocks weighed on the market.

The benchmark Shanghai Composite Index fell 0.9 percent and the blue-chip CSI300 index dropped 1.4 percent as tech shares came under pressure following news that U.S. prosecutors have been investigating if China’s Huawei violated U.S. sanctions on Iran.

The Dow Jones Industrial Average rose 0.25 percent on Wednesday, ending five consecutive sessions of losses, and the S&P 500 gained 0.18 percent on optimism over a spate of upbeat earnings that managed to offset jitters about rising U.S. bond yields.

The rise in the 10-year U.S. Treasury yield to a four-year peak above 3 percent had weighed on stocks amid concerns higher costs to borrow could dampen corporate profits.

Nonetheless, the broader equity market reaction to the latest jump in U.S. yields appeared to be more measured compared to February, when a similar spike in rates sent stocks tumbling.

“The equity markets slid sharply in January and March in response to the rise in Treasury yields. But the Federal Reserve signaled in March that its rate hikes would be gradual,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.


The 10-year yield rose to 3.035 percent on Wednesday, its highest since January 2014. The yield has climbed on expectations of a steady U.S. economic expansion, accelerating inflation and concerns about increasing debt supply. It last stood at 3.031 percent.

U.S. yields have dragged up their European counterparts, with 10-year German bund reaching a six-week high of 0.655 percent and its British Gilt equivalent setting a nine-week peak of 1.57 percent this week.

Asia stocks start new quarter on front foot, dollar steady

Asian Stock Markets

Asian stocks began the new quarter on Monday with modest gains following a strong performance by global equities last week, while the dollar held steady ahead of key economic indicators. 

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.15 percent.

South Korea’s KOSPI was flat and Japan’s Nikkei advanced 0.5 percent. Shanghai was up 0.3 percent.
Wall Street surged last Thursday as technology stocks rebounded, ending a tumultuous first quarter on a high note.

Many major financial centers were closed for the Good Friday Easter holiday. Markets in Australia, Hong Kong, Britain and Germany remained shut on Monday while the U.S. market will resume trading.

MSCI’s world equity index ended up 1.2 percent last week. But it lost about 1.5 percent in the first quarter, pushed away from record highs as tensions over global trade escalated, turmoil in the White House deepened and market-leading technology firms wobbled on fears of regulation and other issues.

But they warned that there were looming risks: “Trade protectionism, U.S. economic policy uncertainty, concerns about higher cross-market volatility and risk premium in core rates markets call for a more tactical approach to risk assets.”

While last month’s fears of an all-out global trade war have abated somewhat, tensions between the United States and China over tit-for-tat tariffs kept investors on edge.

China on Monday imposed tariffs on U.S. products including frozen pork, wine and certain fruits and nuts in response to U.S. duties on imports of aluminum and steel.

In currencies, the dollar was steady at 106.350 yen, while the euro was almost unchanged at $1.2317.
The greenback had gained about 0.6 percent against a basket of six major currencies last week helped by a combination of factors including perceived progress on North Korea issues.

The dollar index still lost more than 2 percent last quarter, marking its fifth straight quarter of declines.

U.S. data due this week include Monday’s Institute for Supply Management (ISM) manufacturing index, Wednesday’s ISM non-manufacturing index and the non-farm payrolls report on Friday.

Crude oil prices extended gains, lifted by a drop in U.S. drilling activity as well as by expectations that the United States could re-introduce sanctions against Iran. [O/R]

U.S. drillers cut seven oil rigs in the week to March 29, bringing the total count down to 797. It was the first time in three weeks that the rig-count fell.

U.S. crude futures rose 0.3 percent to $65.14 a barrel and Brent advanced 0.5 percent to $69.67 a barrel.

“But increasing trade friction between China and U.S. is likely to rock global markets and tarnish bullish sentiment in crude oil markets.”

Asia shares cheered by trade hopes, dollar downcast

Asian Stock Markets

 Asian share markets rallied on Tuesday as reports of behind-the-scenes talks between the United States and China rekindled hopes a damaging trade war could be averted, in turn sapping the strength of the dollar and yen. 

Taking their cue from a surge on Wall Street, Japan’s Nikkei climbed 1.7 percent and China blue chips added 1.2 percent.

MSCI’s broadest index of Asia-Pacific shares outside Japan firmed 0.4 percent. South Korea’s KOSPI rose 0.7 percent, adding to gains made after the U.S. exempted the country’s steel from import tariffs. 

The abrupt mood swing came amid reports Chinese and U.S. officials were busy negotiating to avert an all-out trade war. 

White House officials are asking China to cut tariffs on imported cars, allow foreign majority ownership of financial services firms and buy more U.S.-made semiconductors, said a person familiar with the discussions. 

Chinese Premier Li Keqiang on Monday pledged to maintain trade negotiations and ease access to American businesses. 

Even a whiff of a compromise was enough to propel Wall Street to its best day in 2-1/2 years and deliver the Dow its third-biggest point gain ever. 

The Dow jumped 2.84 percent, while the S&P 500 climbed 2.72 percent and the Nasdaq 3.26 percent. All 11 major sectors of the S&P 500 gained, with technology up 4.0 percent and finance 3.2 percent.

The sudden bout of optimism on trade helped offset news the United States and many of its Allies were expelling more than 100 Russian diplomats in retaliation for a nerve agent attack on a former Russian spy in Britain. 

The surge in stocks dragged on the Treasury market, which faces a record $294 billion of new supply this week. 

Yields on 10-year Treasury notes inched up to 2.856 percent, but remained short of last week’s top above 2.90 percent. 

In currency markets the reaction was to offload both the yen and the U.S. dollar.

Short-covering against the euro was especially sharp as the common currency jumped 1.4 percent overnight to stand at 131.32 yen. 

That allowed the U.S. dollar to bounce to 105.69 yen, having been at its lowest since late 2016 at one point. Yet the U.S. currency ran into selling against almost everything else, with notable breaks by the euro and sterling. 

The euro was up at $1.2450, after cracking the March top at $1.2446, and bulls were eyeing the peak for the year so far at $1.2556. 

The broad-based softness kept the dollar retrained against a basket of currencies at 89.121, after touching a five-week trough of 88.979. 

The improved mood on trade gave a fillip to industrial commodities, with copper and iron ore bouncing, while spot gold was steady around $1,352.00 an ounce. 

In oil markets, U.S. crude futures put on 19 cents to $65.74 a barrel, while Brent crude added 14 cents to $70.26 a barrel. 

Last week, Brent advanced 6.4 percent and WTI rose 5.7 percent for the strongest gains since July.

Asian Stocks Mixed Before U.S. Inflation; Yen Down

Stocks put in a mixed session in Asia Tuesday ahead of a key U.S. inflation report that may affect the outlook for Federal Reserve policy tightening. The yen retreated as immediate concerns about a political scandal in Japan subsided.

Japanese stocks fluctuated before closing higher, while Hong Kong and Chinese shares drifted. Australian equities slid, weighed down by banks and miners. 

Futures on the S&P 500 Index were little changed. The yen gave up gains spurred yesterday by questions about the tenure of Japanese Finance Minister Taro Aso. The U.S. 10-year note yield held at 2.88 percent after a Treasury auction was broadly in line with expectations

Given the Abe administration’s strong support for a weaker yen since taking office in December 2012, the potential damage of a scandal surrounding a controversial sale of land had caught traders’ attention on Monday.

But with the finance chief rebuffing the idea of resignation, and no major ruling party members pushing for such a move, the affair offered no new fodder for investors Tuesday.


Focus now turns to American inflation and retail sales data, followed by reports on Chinese industrial production, retail sales and fixed-asset investment/ The U.S. inflation reading is the last major piece of data ahead of the Federal Reserve’s policy meeting next week.

U.S. politics also remain an issue, after President Donald Trump issued an executive order blocking Broadcom Ltd. from acquiring Qualcomm Inc., scuttling a $117 billion hostile takeover that had been subject of scrutiny over the deal’s threat to U.S. national security.

Japan’s Topix index gained 0.6 percent at the close in Tokyo.

South Korea’s Kospi index was up 0.4 percent.

Australia’s S&P/ASX 200 Index declined 0.4 percent.

Hong Kong’s Hang Seng Index fell 0.2 percent and the Shanghai Composite Index lost 0.5 percent.

S&P 500 Index futures were up about 0.1 percent. The underlying measure lost 0.1 percent Monday.

Asian shares regain; moderate trade war fears

Asian Stock Markets

Asian shares regained some ground on Tuesday after U.S. President Donald Trump faced growing pressure from political allies to pull back from proposed steel and aluminum tariffs, easing investor worries about an imminent trade war. 

Sentiment was also supported by receding risk aversion in Europe with the euro gaining support from the creation of a coalition government in Germany and the impact of Italy’s inconclusive election results limited to a mild sell-off in domestic bonds and stocks.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.3 percent while Japan’s Nikkei jumped 2.3 percent, a day after it hit a five-month low.

Korean shares have erased all the losses they had taken after Trump’s announcement even though the country is seen as being among the worst affected in region by the tariffs due to its big steel exports to the United States.

MSCI’s broadest gauge of the world’s stock markets rose 0.3 percent after having snapped a four-day losing streak on Monday with a gain of 0.7 percent.

Wall Street shares have now recouped all the losses incurred after Trump unveiled a plan to impose tariffs on steel and aluminum late on Thursday.

Leading Republicans, including House of Representatives Speaker Paul Ryan and Representative Kevin Brady, turned up the pressure on Trump to rethink the plan on Monday.

Some investors also saw the tariffs threats as a U.S. negotiating tactic to get a better deal on NAFTA.

Still, uncertainty remains with confusion about the timing and extent of the planned tariffs inside the 

The specter of a trade war was not the only source of concern for the stock market.

As the global economy steams ahead, investors have become increasingly concerned that U.S. inflation, which has been subdued since the 2008 financial crisis, could finally pick up.

While moderate inflation generally supports equity investors, rapid inflation, or fear of it, could prompt the Federal Reserve to hike rates faster, undermining the attraction of equities.

U.S. bond yields rose as Wall Street shares rallied. The 10-year U.S. Treasuries yield rose back to 2.882 percent from last week’s low of 2.793 percent. A break of last month’s peak of 2.957 percent could trigger fresh selling in Treasuries, traders say.

In the currency market, the euro traded at $1.2352, extending its recovery from a seven-week low of $1.21545 hit on Thursday.

The euro managed to recover losses made on Monday after two anti-establishment leaders made early plays to govern Italy following an inconclusive election where voters shunted mainstream parties to the sidelines.

The dollar fetched 106.41 yen, up 0.2 percent for the day, crawling back from its 16-month low of 105.24 touched on Friday on improved risk appetite. 

The Canadian dollar hit an eight-month low of C$1.3002 per U.S. dollar as U.S. President Donald Trump used proposed tariffs on steel and aluminum as a bargaining chip in talks to revamp NAFTA.

Asian markets - sea of red with Japan’s Nikkei and South Korea’s KOSPI both down

Asian Stock Markets

Asian investors dumped shares and drove to the safety of the yen and gold on Monday amid fears of a global trade war and worries of political uncertainty in Italy, risks that cloud the outlook for world growth. 

Italian voters delivered a hung parliament on Sunday, flocking to anti-establishment and far-right parties in record numbers and casting the euro zone’s third-largest economy into a political gridlock that could take months to clear.

The euro traded choppily around $1.2320, easing from a two-week high of $1.2365 as the eurosceptic 5-Star Movement saw its support soar to become the largest single party, according to projections based on early vote-counting.

In the United States, President Donald Trump proposed tariffs on imported steel and aluminium, a pledge that met with warnings of retaliation from the rest of the world over the weekend.

The spectre of a global trade war hit risk appetite, sending MSCI’s broadest index of Asia-Pacific shares outside Japan down 0.8 percent to the lowest since mid-February.

U.S. stock futures did not inspire much confidence, with S&P E-Minis down 0.6 percent and Dow futures off 0.4 percent.

The euro still found support after Germany’s Social Democrat party decisively backed the renewal of an alliance with Chancellor Angela Merkel’s conservatives, allowing her to form a new government more than five months since the country’s inconclusive election.

The single currency also got a lift from some safe-haven flows, as did the Japanese yen.

The dollar fell for a fourth straight session to trade around 105.52 yen, but was slightly above Friday’s low of 105.23, a level not seen since November 2016.

Canada and Mexico have threatened retaliation, and the European Union said it would apply 25 percent tariffs on about $3.5 billion of imports from the United States if Trump carried out his threat.

China said on Sunday it did not want a trade war with the United States but will defend its interests, warning that policies based on“mistaken assumptions” will damage bilateral relations. 

Asian markets were a sea of red with Japan’s Nikkei and South Korea’s KOSPI both down about 1 percent, while Chinese shares eased too after starting on a positive note. 

Hong Kong’s Hang Seng index slipped 1.4 percent. 

Investors will keep an eye on a deluge of data this week, culminating in the U.S. non-farm payrolls on Friday. The annual opening of the National People’s Congress in China was another focus for investors. China’s parliament has kept the economy’s growth target at 6.5 percent for this year.

In commodities, oil prices climbed ahead of a meeting between OPEC and U.S. shale firms in Houston, raising expectations that oil producers would discuss further how to clear a global glut.

Brent crude was up 25 cents at $64.63 a barrel while U.S. light crude added 23 cents to $61.48.

Spot gold climbed 0.3 percent to $1,326.46.

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 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.

Markets in Asia edge higher; South Korea's Kospi rises 1.1%

Asia Stock Markets

Asian stocks advanced on Friday after U.S. stock indexes mostly edged higher in the last session. 

Gains in the region were led by South Korea's Kospi, which bounced back to rise more than 1 percent after slipping in the last session.

The Nikkei 225 edged up 0.42 percent. Oil-related stocks were higher following the rise in oil prices overnight.

Inpex and JXTG Holdings added 2.62 percent and 3.72 percent, respectively.

Automakers were also in positive territory, with Toyota climbing 0.37 percent.

The technology sector was a mixed picture: Heavyweight SoftBank Group added 1.34 percent and Sony lost 0.15 percent.

On the data front, Japan's core consumer price index rose 0.9 percent in January compared to one year ago, a touch above the 0.8 percent rise forecast, Reuters reported.

Gains in Seoul were more convincing, with the benchmark Kospi index advancing 1.05 percent.

Major technology stocks traded higher in the afternoon, with Samsung Electronics and SK Hynix gaining 0.51 percent and 1.84 percent, respectively.

Manufacturers were also in positive territory, with steelmaker Posco climbing 0.83 percent.

Meanwhile, shipbuilder Hyundai Heavy Industries rose 3.6 percent and Lotte Chemical added 3.73 percent.

In Sydney, the S&P/ASX 200 tacked on 0.69 percent. Major miners Rio Tinto and BHP were up 0.7 percent and 1.29 percent, respectively, contributing to the materials sector's overall gains.

Oil-related stocks were mostly higher following the rise in oil prices in the last session.

Woodside Petroleum added 0.74 percent and Oil Search gained 0.67 percent, although oil producer Santos slipped 0.19 percent.

Airline stocks also made gains, with Qantas up 2.69 percent after reporting record interim profit on Thursday.

Meanwhile, Hong Kong's Hang Seng Index rose 0.84 percent.

Tech heavyweight Tencent contributed 31 points — the most among the index's constituents — to the Hang Seng's gains in the morning.

The property sector was the best-performer in the day and gains were seen in large cap developers before the lunch break.

Country Garden jumped 3.95 percent and CK Asset was higher by 1.12 percent. The financials sector also advanced, with Industrial and Commercial Bank of China gaining 0.86 percent.

Markets on the mainland which had earlier recorded slight gains were mixed in the afternoon: The Shanghai composite inched higher by 0.09 percent and the Shenzhen composite slipped 0.21 percent.

Of note, regulators in the country said they would take over Anbang Insurance Group for a year beginning Feb. 23.

The move came amid an ongoing crackdown on debt in China.

The upbeat sentiment was also seen in other regional markets. Taiwan's Taiex rose 1.01 percent and Singapore's Straits Times Index advanced 1 percent in the afternoon.

Bullard's comments came after the Federal Reserve indicated in minutes released earlier this week that a gradual firming in monetary policy was justified due to an expected pick-up in inflation.

Shares in Asia had closed mixed in the previous session following the release of those minutes, with the Nikkei and Hang Seng closing lower by more than 1 percent.


On Wall Street, the Nasdaq composite finished lower for the fourth consecutive session as concerns over higher interest rates lingered.

That was in contrast to the gains seen in other major U.S. stock indexes.

Markets also considered minutes from the European Central Bank's January meeting released on Thursday, which reflected that it could take another look at its policy "early this year."

The dollar, meanwhile, clawed back some of its gains pared overnight.

The dollar index, which tracks the U.S. currency against six rivals, stood at 89.887 at 12:34 p.m.

HK/SIN, off an overnight high of 90.235 but a touch firmer than Thursday's close of 89.713.

Against the yen, the dollar firmed to trade at 106.89. That compared to the 107 handle seen mid-week.

Meanwhile, the Australian dollar slipped 0.25 percent to trade at $0.7825 and the New Zealand dollar declined 0.6 percent to trade at $0.7294.

The chief of Australia's central bank has indicated that there was no pressing reason to raise rates anytime soon.

On the energy front, oil prices were steady after touching their highest levels in two years in the overnight session following a surprise reported decline in U.S. crude stocks.

U.S. West Texas Intermediate futures traded off by 0.03 percent at $62.75 per barrel. Brent crude futures edged down by 0.08 percent to trade at $66.34.

 

Corporate news

In individual stocks, shares of Australian supermarket chain Woolworths Group fell 2.57 percent after the company reported first-half net profit rose 14.7 percent to 902 million Australian dollars ($708 million).

Meanwhile, Commonwealth Bank of Australia denied most of the 100 additional allegations made against the bank by Australian financial intelligence agency AUSTRAC in a Friday statement.

CBA shares rose 1.06 percent on Friday, leading gains seen in Australia's banking sector.

Asia shares rebound as fidgety U.S. rate fears ebb again

Asia Stock markets

Asian shares rebounded on Friday as comments from a Federal Reserve official eased worries about faster rate rises in the United States, while the safe-haven yen held on to its gains amid heightened volatility across markets. 

Financial markets have fluctuated wildly this month as investors fretted about how fast the Fed might raise rates in the wake of data showing a pick up in U.S. inflation. 

Even though broader U.S. price pressures still appear modest for now, markets are now fully pricing in three rate hikes this year, one more than was seen just a few months ago, and some analysts now expect four. 

That in turn has stoked anxiety that many central banks will start to tighten policy and raise borrowing costs, which will hit corporate earnings, which have boomed thanks to a synchronized uptick in global growth. 

MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 1 percent, adding to the previous week’s 3.9 percent gain. 

It is still down more than 4 percent in February so far, however, after global equity markets were mauled at the start of the month by worries that inflation is picking up. 

Japan’s Nikkei edged 0.4 percent higher and South Korea’s KOSPI index rose 1.1 percent. China’s SSE Composite index and the blue-chip CSI300 each rose 0.7 percent. 

All Asian markets except Philippines eked out gains following a sell-off on Thursday after minutes of the Fed’s last meeting showed policy makers were confident about the economic outlook. 

That prompted some investors to boost the chance of faster rate hikes. 

St Louis Fed President James Bullard tried to tamp down of expectations of four rate hikes in 2018, instead of the widely anticipated three, saying on Thursday policymakers need to be careful not to increase rates too quickly because that could slow the economy. 

That was enough to send U.S. shares rallying, despite the negative lead from Asia and Europe. 

On Wall Street, the Dow added 0.7 percent, the S&P 500 ended a tad firmer while the Nasdaq lost 0.11 percent.

The Fed had caused a so called “taper tantrum” in May 2013 when it signalled it was time to stop pumping cash into the U.S. economy, a move that created havoc in financial markets particularly Asia. 

But analysts are more upbeat about the outlook for Asia despite prospects of rising U.S. inflation and rates. 

Analysts expect the market to be in a “holding pattern” ahead of a slew of important U.S. January activity data on Tuesday, followed by global surveys on manufacturing activity on Thursday. 

 

CURRENCIES

The dollar sagged broadly on Friday after its recovery this week faded as U.S. Treasury yields declined from their recent peaks. 

Benchmark 10-year note yields were last yielding 2.9317 percent, after rising to a four-year high of 2.957 percent on Wednesday.

The euro was little changed at $1.2311 after gaining 0.4 percent the previous day. 

The common currency has lost 0.75 percent so far this week, following its ascent to a three-year top of $1.2556 on Feb. 16. 

The yen, which tends to benefit during times of heightened volatility or uncertainty, rose almost 1 percent overnight to last fetch around 106.8 per dollar. 

Oil prices hovered near two-week highs, supported by lower U.S. crude inventories, but gains were capped by a surge in U.S. exports. [O/R] 

U.S. crude added 6 cents to $62.83 per barrel and Brent eased 1 cent to $66.38. Spot gold ticked lower to $1329.01 an ounce.

Asian stocks slip after European surge fades, dollar edges up

Asian Stock Markets

Asian stocks slipped on Tuesday, their recent recovery stalling after European equities broke a winning streak, while the dollar edged up to pull further away from three-year lows. 

MSCI’s broadest index of Asia-Pacific shares outside Japan shed 0.5 percent. Australian stocks fell 0.3 percent, South Korea’s KOSPI lost 0.7 percent and Hong Kong’s Hang Seng dropped 0.85 percent. 

Japan’s Nikkei retreated 1.25 percent after three successive days of gains. 

The pan-European STOXX index fell 0.6 percent on Monday following a three-day ascent, dragged down by falls in consumer staples stocks. 

U.S. markets were closed on Monday for a holiday, and the focus will be on whether Wall Street can maintain its recovery once trading resumes. 

The Dow gained 4.5 percent last week, winning back more than half of the territory lost during a sharp downturn earlier in the month. 

The VIX index - Wall Street’s “fear gauge” measure of market volatility - has slipped below 20, less than half the 50-point peak touched earlier in February. 

The dollar index against a basket of six major currencies was 0.3 percent higher at 89.348 to put further distance between a three-year low of 88.253 set on Friday. 

The dollar was a shade higher at 106.720 yen and the euro dipped 0.15 percent to $1.2388. 

Oil prices hovered near two-week highs, lifted by tensions in the Middle East after Israeli Prime Minister Benjamin Netanyahu said on Sunday that Israel could act against Iran itself, not just its allies in the region. 

U.S. crude futures were 0.8 percent higher at $62.16 per barrel after touching $62.74, the highest since Feb. 7.Spot gold slipped 0.35 percent to 1,341.24 an ounce, weighed by the dollar’s bounce.

Asian stocks pull further off two-month lows as Wall St. bounces

Asian Stock Markets

Asian stocks pulled further away from two-month lows on Tuesday, lifted by Wall Street’s extended rebound from last week’s steep fall, but investors remained cautious ahead of U.S. inflation data later in the week. 

Spreadbetters expected a higher open for European equities, forecasting 0.25 percent gains for Britain’s FTSE and 0.3 percent for Germany’s DAX and France’s CAC.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 1.1 percent after sliding to its lowest level since Dec. 11 on Friday.

Australian stocks rose 0.6 percent and South Korea’s KOSPI climbed 0.65 percent. Japan’s Nikkei started higher but lost steam to slip 0.75 percent.

The Shanghai Composite Index was 1 percent higher, buoyed by global gains and suggestions of possible Chinese government support.

An affiliate of China’s securities regulator on Monday encouraged major shareholders of domestically-listed firms to increase their holdings after last week’s global selloff mauled Chinese stocks.

Wall Street’s three major indexes rose for the second day on Monday as investors regained some confidence after U.S. equities had their biggest weekly drop in two years. 

Still, caution lingered in the broader markets following the U.S.-led tumble in riskier assets last week and ahead of U.S. inflation data on Wednesday. A stronger-than-expected reading on price pressures could trigger a fresh wave of selling.

The 10-year Treasury note yield edged back to 2.849 percent after rising to a four-year peak of 2.902 percent on Monday.

The dollar index against a basket of six major currencies extended modest losses suffered overnight and dipped 0.25 percent to 89.987. The index edged back from a two-week high of 90.567 scaled late last week, when it had benefited as a safe haven in the wake of the global market selloff.

The greenback lost 0.3 percent to 108.285 yen, weighed by the sagging Nikkei. The euro added 0.15 percent to $1.2310.

The South African rand was little changed at 11.91 per dollar after slipping briefly following news that the country’s ruling party African National Congress had opted to sack President Jacob Zuma.

The rand had risen 2 percent over the past two days, helped by hopes that Zuma would step down, but ran into resistance as the latest news was seen potentially prolonging the political standoff.

The Australian dollar was steady at $0.7866 after rising about 0.6 percent overnight on the back of higher commodity prices and improvement in broader risk sentiment.

Copper prices also bounced further away from two-month lows as more stable global markets encouraged investors to return to commodities.

Copper on the London Metal Exchange extended an overnight rally to trade 1.4 percent higher at $6,927.00 per tonne.

Commodities were also supported by the dollar’s pullback from two-week highs. A lower greenback favors non-U.S. buyers by reducing the price of dollar-denominated commodities.

Brent crude rose 0.55 percent to $62.94 per barrel.

Spot gold was 0.3 percent higher at $1.326.51 an ounce.