You are here: Home » Reuters » News
Business Standard

Asian shares drop, Treasury yields near high as markets brace for aggressive U.S. rate rises

Reuters  |  SINGAPORE 

By Nichola Saminather

(Reuters) - Asian joined and in surrendering some recent gains on Friday, retreating on the possibility of faster-than-expected U.S. increases that boosted 10-year U.S. Treasury yields to an 18-month high overnight.

European were headed for a lower start, with financial spreadbetters expecting the Euro STOXX 50 index to open 0.8 percent lower, Britain's FTSE 100 to shed 0.7 percent and Germany's DAX to begin the day 0.6 percent lower.

Investors in remain nervous ahead of a constitutional referendum in Italy and a presidential election in Austria this weekend.

Yields for 10-year U.S. Treasuries pulled back to 2.4357 percent on Friday, after touching an 18-month high of 2.492 percent on Thursday.

Investors will be looking to the U.S. non-farm payrolls report later in the day for further evidence of improvement in the economy, after data showed factory activity accelerating in November and construction spending at a seven-month high in October.

The strong data have boosted expectations, which have already been running high due to anticipated inflationary pressures from rising oil prices and President-elect Donald Trump's promises of fiscal stimulus.

"We've seen a super strong streak of data coming out of the U.S. and the market is starting to price, with a higher certainty, more aggressive rate hikes by the Fed," said Christopher Moltke-Leth, head of institutional client trading at Saxo Capital in Singapore.

"This is a concern for stocks."

MSCI's broadest index of Asia-Pacific outside Japan dropped 0.9 percent, and was on track to end the week 0.3 percent lower.

Japan's Nikkei, which jumped to an 11-month high on Thursday, closed down 0.5 percent on Friday, but still posted a weekly gain of 0.24 percent.

China's CSI 300 index retreated 1 percent, shrinking gains for the week to 0.2 percent. Hong Kong's Hang Seng index, Asia's biggest decliner on Friday with a 1.2 percent drop, is heading for a 0.6 percent weekly loss.

South Korean dropped 0.7 percent, poised for a loss of 0.2 percent for the week, after opposition parties said they would propose a motion later on Friday to impeach President Park Geun-hye over an influence-peddling scandal, with the intention of holding a vote on her impeachment on Dec. 9.

Also contributing to higher inflation expectations is the recent jump in oil prices.

benchmark Brent futures jumped to a 16-month high of $54.53 a barrel on Thursday after the Organization of Petroleum Exporting Countries agreed its first output cuts since 2008. Russia also agreed to reduce production for the first time in 15 years.

They pulled back 1.2 percent on Friday to $53.32 as investors took profits, but are set for a weekly rise of 12.9 percent.

Having climbed almost 13 percent in the past two days, U.S. crude surrendered some gains on Friday, falling 0.8 percent to $50.64. It is on track for an increase of 9.9 percent this week.

On Wall Street, while the Dow Jones Industrial Average set a record closing high, the S&P 500 and the Nasdaq ended the day with losses as expensive technology stocks pulled back.

The dollar, which hit the highest level since February versus the yen earlier on Thursday, was flat at 114.055 yen amid caution over the jobs report.

It remains on track for a weekly gain of 0.8 percent.

"The dollar could test the 115 yen threshold depending on how the U.S. jobs report turns out," said Daisuke Karakama, market economist at Mizuho Bank.

The dollar index, which tracks the greenback against a basket of six major peers, slipped 0.3 percent on Friday, extending losses for the week to 0.7 percent.

The British pound touched a near-two-month high versus the dollar on Thursday after Brexit minister David Davis said Britain would consider paying into the European Union budget for market access.

Sterling added 0.2 percent from Thursday's close to trade at $1.2617 on Friday, heading for a weekly rise of 1.1 percent.

The euro also strengthened on Thursday, rising 0.7 percent, and added 0.2 percent to $1.06825 on Friday, putting it on track for a 1 percent increase this week.

(Reporting by Nichola Saminather; Additional reporting by Shinichi Saoshiro in Tokyo; Editing by Simon Cameron-Moore and Kim Coghill)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

RECOMMENDED FOR YOU

Asian shares drop, Treasury yields near high as markets brace for aggressive U.S. rate rises

SINGAPORE (Reuters) - Asian shares joined Wall Street and Europe in surrendering some recent gains on Friday, retreating on the possibility of faster-than-expected U.S. interest rate increases that boosted 10-year U.S. Treasury yields to an 18-month high overnight.

By Nichola Saminather

(Reuters) - Asian joined and in surrendering some recent gains on Friday, retreating on the possibility of faster-than-expected U.S. increases that boosted 10-year U.S. Treasury yields to an 18-month high overnight.

European were headed for a lower start, with financial spreadbetters expecting the Euro STOXX 50 index to open 0.8 percent lower, Britain's FTSE 100 to shed 0.7 percent and Germany's DAX to begin the day 0.6 percent lower.

Investors in remain nervous ahead of a constitutional referendum in Italy and a presidential election in Austria this weekend.

Yields for 10-year U.S. Treasuries pulled back to 2.4357 percent on Friday, after touching an 18-month high of 2.492 percent on Thursday.

Investors will be looking to the U.S. non-farm payrolls report later in the day for further evidence of improvement in the economy, after data showed factory activity accelerating in November and construction spending at a seven-month high in October.

The strong data have boosted expectations, which have already been running high due to anticipated inflationary pressures from rising oil prices and President-elect Donald Trump's promises of fiscal stimulus.

"We've seen a super strong streak of data coming out of the U.S. and the market is starting to price, with a higher certainty, more aggressive rate hikes by the Fed," said Christopher Moltke-Leth, head of institutional client trading at Saxo Capital in Singapore.

"This is a concern for stocks."

MSCI's broadest index of Asia-Pacific outside Japan dropped 0.9 percent, and was on track to end the week 0.3 percent lower.

Japan's Nikkei, which jumped to an 11-month high on Thursday, closed down 0.5 percent on Friday, but still posted a weekly gain of 0.24 percent.

China's CSI 300 index retreated 1 percent, shrinking gains for the week to 0.2 percent. Hong Kong's Hang Seng index, Asia's biggest decliner on Friday with a 1.2 percent drop, is heading for a 0.6 percent weekly loss.

South Korean dropped 0.7 percent, poised for a loss of 0.2 percent for the week, after opposition parties said they would propose a motion later on Friday to impeach President Park Geun-hye over an influence-peddling scandal, with the intention of holding a vote on her impeachment on Dec. 9.

Also contributing to higher inflation expectations is the recent jump in oil prices.

benchmark Brent futures jumped to a 16-month high of $54.53 a barrel on Thursday after the Organization of Petroleum Exporting Countries agreed its first output cuts since 2008. Russia also agreed to reduce production for the first time in 15 years.

They pulled back 1.2 percent on Friday to $53.32 as investors took profits, but are set for a weekly rise of 12.9 percent.

Having climbed almost 13 percent in the past two days, U.S. crude surrendered some gains on Friday, falling 0.8 percent to $50.64. It is on track for an increase of 9.9 percent this week.

On Wall Street, while the Dow Jones Industrial Average set a record closing high, the S&P 500 and the Nasdaq ended the day with losses as expensive technology stocks pulled back.

The dollar, which hit the highest level since February versus the yen earlier on Thursday, was flat at 114.055 yen amid caution over the jobs report.

It remains on track for a weekly gain of 0.8 percent.

"The dollar could test the 115 yen threshold depending on how the U.S. jobs report turns out," said Daisuke Karakama, market economist at Mizuho Bank.

The dollar index, which tracks the greenback against a basket of six major peers, slipped 0.3 percent on Friday, extending losses for the week to 0.7 percent.

The British pound touched a near-two-month high versus the dollar on Thursday after Brexit minister David Davis said Britain would consider paying into the European Union budget for market access.

Sterling added 0.2 percent from Thursday's close to trade at $1.2617 on Friday, heading for a weekly rise of 1.1 percent.

The euro also strengthened on Thursday, rising 0.7 percent, and added 0.2 percent to $1.06825 on Friday, putting it on track for a 1 percent increase this week.

(Reporting by Nichola Saminather; Additional reporting by Shinichi Saoshiro in Tokyo; Editing by Simon Cameron-Moore and Kim Coghill)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
177 22

Asian shares drop, Treasury yields near high as markets brace for aggressive U.S. rate rises

By Nichola Saminather

(Reuters) - Asian joined and in surrendering some recent gains on Friday, retreating on the possibility of faster-than-expected U.S. increases that boosted 10-year U.S. Treasury yields to an 18-month high overnight.

European were headed for a lower start, with financial spreadbetters expecting the Euro STOXX 50 index to open 0.8 percent lower, Britain's FTSE 100 to shed 0.7 percent and Germany's DAX to begin the day 0.6 percent lower.

Investors in remain nervous ahead of a constitutional referendum in Italy and a presidential election in Austria this weekend.

Yields for 10-year U.S. Treasuries pulled back to 2.4357 percent on Friday, after touching an 18-month high of 2.492 percent on Thursday.

Investors will be looking to the U.S. non-farm payrolls report later in the day for further evidence of improvement in the economy, after data showed factory activity accelerating in November and construction spending at a seven-month high in October.

The strong data have boosted expectations, which have already been running high due to anticipated inflationary pressures from rising oil prices and President-elect Donald Trump's promises of fiscal stimulus.

"We've seen a super strong streak of data coming out of the U.S. and the market is starting to price, with a higher certainty, more aggressive rate hikes by the Fed," said Christopher Moltke-Leth, head of institutional client trading at Saxo Capital in Singapore.

"This is a concern for stocks."

MSCI's broadest index of Asia-Pacific outside Japan dropped 0.9 percent, and was on track to end the week 0.3 percent lower.

Japan's Nikkei, which jumped to an 11-month high on Thursday, closed down 0.5 percent on Friday, but still posted a weekly gain of 0.24 percent.

China's CSI 300 index retreated 1 percent, shrinking gains for the week to 0.2 percent. Hong Kong's Hang Seng index, Asia's biggest decliner on Friday with a 1.2 percent drop, is heading for a 0.6 percent weekly loss.

South Korean dropped 0.7 percent, poised for a loss of 0.2 percent for the week, after opposition parties said they would propose a motion later on Friday to impeach President Park Geun-hye over an influence-peddling scandal, with the intention of holding a vote on her impeachment on Dec. 9.

Also contributing to higher inflation expectations is the recent jump in oil prices.

benchmark Brent futures jumped to a 16-month high of $54.53 a barrel on Thursday after the Organization of Petroleum Exporting Countries agreed its first output cuts since 2008. Russia also agreed to reduce production for the first time in 15 years.

They pulled back 1.2 percent on Friday to $53.32 as investors took profits, but are set for a weekly rise of 12.9 percent.

Having climbed almost 13 percent in the past two days, U.S. crude surrendered some gains on Friday, falling 0.8 percent to $50.64. It is on track for an increase of 9.9 percent this week.

On Wall Street, while the Dow Jones Industrial Average set a record closing high, the S&P 500 and the Nasdaq ended the day with losses as expensive technology stocks pulled back.

The dollar, which hit the highest level since February versus the yen earlier on Thursday, was flat at 114.055 yen amid caution over the jobs report.

It remains on track for a weekly gain of 0.8 percent.

"The dollar could test the 115 yen threshold depending on how the U.S. jobs report turns out," said Daisuke Karakama, market economist at Mizuho Bank.

The dollar index, which tracks the greenback against a basket of six major peers, slipped 0.3 percent on Friday, extending losses for the week to 0.7 percent.

The British pound touched a near-two-month high versus the dollar on Thursday after Brexit minister David Davis said Britain would consider paying into the European Union budget for market access.

Sterling added 0.2 percent from Thursday's close to trade at $1.2617 on Friday, heading for a weekly rise of 1.1 percent.

The euro also strengthened on Thursday, rising 0.7 percent, and added 0.2 percent to $1.06825 on Friday, putting it on track for a 1 percent increase this week.

(Reporting by Nichola Saminather; Additional reporting by Shinichi Saoshiro in Tokyo; Editing by Simon Cameron-Moore and Kim Coghill)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
177 22

Upgrade To Premium Services

Welcome User

Business Standard is happy to inform you of the launch of "Business Standard Premium Services"

As a premium subscriber you get an across device unfettered access to a range of services which include:

  • Access Exclusive content - articles, features & opinion pieces
  • Weekly Industry/Genre specific newsletters - Choose multiple industries/genres
  • Access to 17 plus years of content archives
  • Set Stock price alerts for your portfolio and watch list and get them delivered to your e-mail box
  • End of day news alerts on 5 companies (via email)
  • NEW: Get seamless access to WSJ.com at a great price. No additional sign-up required.
 

Premium Services

In Partnership with

 

Dear Guest,

 

Welcome to the premium services of Business Standard brought to you courtesy FIS.
Kindly visit the Manage my subscription page to discover the benefits of this programme.

Enjoy Reading!
Team Business Standard