Asian traders on edge over oil and Italy

The Myanmar Times - - Business -

ASIAN traders moved cau­tiously yes­ter­day, with the re­cent Trump­fu­elled rally sub­dued by prof­ittak­ing, un­cer­tainty over a cru­cial vote in Italy and wor­ries about an OPEC plan to cut oil production.

Mar­kets have soared since Don­ald Trump was elected pres­i­dent on hopes his spend­ing poli­cies will ramp up the US econ­omy.

How­ever, an­a­lysts said dealers were tak­ing a breather as other is­sues come to the fore, with the oil re­duc­tion plan in im­me­di­ate fo­cus.

OPEC mem­bers and non-mem­bers in­clud­ing Rus­sia are scur­ry­ing to ham­mer out a deal be­fore the group’s twice-yearly meet­ing to­day.

“Whether OPEC man­ages to make black gold in­stead of fools gold from its on­go­ing ne­go­ti­a­tions, we ex­pect in­tra-day volatil­ity to ratchet higher again into to­mor­row,” Jef­frey Hal­ley, se­nior mar­ket an­a­lyst at OANDA, said in a note.

There is also a grow­ing ner­vous­ness about a weekend ref­er­en­dum in Italy on con­sti­tu­tional re­form. Ten­sions be­tween Ital­ian Prime Min­is­ter Mat­teo Renzi and the Euro­pean Union have reached boil­ing point ahead of the poll and he has sug­gested he would step down if vot­ers reject the pro­posal.

Asian mar­kets moved in and out of pos­i­tive ter­ri­tory through the day.

Tokyo closed down 0.3 per­cent, while Hong Kong dipped 0.41pc and Shang­hai ended up 0.2pc. Syd­ney slipped 0.1pc while Seoul and Sin­ga­pore were all flat.

On cur­rency mar­kets the dol­lar was sub­dued, hav­ing chalked up multi-month highs against most peers last week on ex­pec­ta­tions US in­ter­est rates will rise in De­cem­ber and again next year.

“The dol­lar pull­back ap­pears to be tech­ni­cal in na­ture as there was no fun­da­men­tal trig­ger for this move,” Elias Had­dad of Com­mon­wealth Bank of Aus­tralia said. –

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