MAR­KETS Asia shares strug­gle to rally as oil skids fur­ther

Viet Nam News - - FRONT PAGE -

SYD­NEY — Asian shares fought to sus­tain the slimmest of re­cov­er­ies yesterday amid spec­u­la­tion the Fed­eral Re­serve might be “one­and-done” with US rate hikes, while oil fell anew as pro­duc­ers bick­ered over the de­tails of an out­put cut.

MSCI’s broad­est in­dex of Asi­aPa­cific shares out­side Ja­pan nudged up 0.4 per cent, though that fol­lowed a 1.8 per cent drub­bing on Thurs­day. Ja­pan’s Nikkei added 0.8 per cent.

Chi­nese shares, which were up ear­lier in the day, slipped into neg­a­tive ter­ri­tory with the blue chips off 0.1 per cent. E-Mini fu­tures for the S&P 500 too started firmer but were last down 0.1 per cent.

Spread­bet­ters, how­ever, pointed to a strong start for Europe with Lon­don’s FTSE fu­tures up 1.8 per cent.

There was no es­cap­ing con­cerns over Sino-US re­la­tions af­ter the ar­rest of smart­phone maker Huawei Tech­nolo­gies Co Ltd Chief Fi­nan­cial Of­fi­cer Meng Wanzhou threat­ened to chill talks on some form of trade truce.

Mar­kets also face a test from US pay­rolls data later in the ses­sion amid spec­u­la­tion the econ­omy was head­ing for a tough patch af­ter years of solid growth.

Fed­eral Re­serve Chair­man Jerome Pow­ell em­pha­sised the strength of the la­bor mar­ket in re­marks made late Thurs­day.

Economists polled by Reuters fore­cast jobs rose by 200,000 in Novem­ber af­ter surg­ing 250,000 in Oc­to­ber.

“A view has de­vel­oped of US growth nor­mal­iz­ing a lit­tle faster than ex­pected from the fis­cal ‘su­gar rush’, while in­fla­tion­ary pres­sures re­main con­tained given the sharp fall in the oil price,” said Na­tional Aus­tralia Bank economist Tapa Strick­land.

“Pay­rolls will be very im­por­tant in help­ing to val­i­date whether the econ­omy is in­deed slow­ing faster than ex­pected.”

Trea­suries ex­tended their blis­ter­ing rally, driv­ing 10-year yields down to a three-month trough at 2.8260 per cent, be­fore last trad­ing at 2.89 per cent.

Yields on two-year notes fell a huge 10 ba­sis points at one stage on Thurs­day and were last at 2.76 per cent.

In­vestors also steam­rolled the yield curve to its flat­test in over a decade, a trend that has his­tor­i­cally pre­saged eco­nomic slow­downs and even re­ces­sions.

“The sort of flat­ten­ing of the yield curve that we have seen re­cently usu­ally in­di­cates that in­vestors think the Fed is near­ing the end of a tight­en­ing cy­cle, and that rate cuts may even be on the hori­zon,” ar­gued an­a­lysts at Cap­i­tal Eco­nomics.

The seis­mic shock spread far and wide. Yields on 10-year pa­per sank to the low­est in six months in Ger­many, al­most 12 months in Canada and 16 months in Aus­tralia.

The sea change in ex­pec­ta­tions took a toll on the US dol­lar as bulls had been count­ing heav­ily on a steady widen­ing rate dif­fer­en­tial to pro­pel the cur­rency.

The green­back eased against a bas­ket of currencies to 96.803, and fell to 112.85 yen from a 113.85 high at the start of the week. The euro was up around 0.4 per cent on the week so far at $1.1366.

Crp­tocur­rency Bit­coin took a fresh spill to be down al­most 18 per cent for the week at US$3,363.37.

In com­mod­ity mar­kets, gold firmed to near a five-month peak as the dol­lar eased and the threat of higher in­ter­est rates waned. Spot gold stood at $ 1,239 per ounce.

Oil was less fa­vored, how­ever, fall­ing fur­ther as OPEC de­layed a de­ci­sion on out­put cuts while await­ing sup­port from non-OPEC heavy­weight Rus­sia.

Brent fu­tures slipped 52 cents to $59.54 a bar­rel, while US crude lost 40 cents to $51.09. — REUTERS

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