Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesHot NewsMost Read NewsRecomm.Business LeadersCalendar 

Euro under a cloud in Asia, stocks sit on gains

share with twitter share with LinkedIn share with facebook
share via e-mail
0
06/11/2014 | 08:51am CEST

The euro came under mounting pressure on Wednesday as the European Central Bank's embrace of negative interest rates encouraged flows out of the zone, while Asian shares consolidated near recent highs.

The single currency was slipping across the board as investors looked to borrow euros at super-low rates and buy higher-yielding assets abroad, the so-called carry trade.

"The chase for yield looks like it has further to run," said Shane Oliver, head of investment strategy at AMP Capital.

"The ECB’s actions provide a reminder global monetary conditions remain very easy which is supportive of relatively high yield assets and growth assets generally."

In contrast the dollar found support in a run of improving U.S. economic data which pushed up Treasury yields and stoked speculation the Federal Reserve might sound less dovish on policy when it meets next week.

That diverging outlooks shoved the euro down to $1.3536 and further away from a $1.3668 peak scored at the start of the week.

It also hit a seven-month trough on the higher-yielding Australian dollar and to near its lowest against the pound since late 2007.

Action in equity markets was more muted with many indices already having come a long way. MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.12 percent from a three-year peak.

The MSCI index of emerging markets has also been on a roll to reach its highest since May 2013, in part on speculation the ECB's increasingly aggressive easing will encourage fund flows to the emerging world.

Japan's Nikkei ended up 0.5 percent aided by MSCI's decision to remove South Korea and Taiwan indexes from its review list for reclassification to developed markets, keeping them in the emerging markets classification.

There had been speculation Tokyo equities would take the brunt of rebalancing if Korean and Taiwanese shares were reclassified to developed markets.

Moves had been minor on Wall Street with the Dow up 0.02 percent, while the S&P 500 down 0.02 percent and the Nasdaq Composite 0.04 percent firmer.

RISING YIELDS

The flow of U.S. data has been bright enough to soothe worries over the economy after a disappointing first quarter. Tuesday's releases showed small business confidence and job openings reaching heights not seen since 2007.

That in turn has led the futures market <0#FF:> to nudge forward the likely timing for a first rate hike from the Federal Reserve, though that is still well into 2015.

Likewise, U.S. Treasury yields have reversed decisively higher with 10-year paper paying 2.646 percent compared to a trough of 2.402 percent just two weeks ago.

"The bull moves in bonds that began early this year are now officially over," said William O'Donnell Treasury strategist at RBS Markets. "As such, I still expect cash 10-years to trade at 2.80 percent over the coming month."

The prospect of higher yields has offered some support to the U.S. dollar which held at 80.811 against a basket of currencies, a long way from May's low of 78.906.

Still, the broader moves were more about euro weakness than dollar strength. Sales of euros for yen, for instance, were sizable enough to push the yen up on the dollar. The euro fell to 138.44 yen and the dollar to 102.25.

The adoption of negative deposit rates by the ECB has sparked talk reserve managers at other central banks were trimming their euro holdings, and that the very low yields offered by peripheral euro zone debt was finally discouraging demand for the paper.

In commodities, gold was firm at $1,261.50 an ounce as a breakdown in strike talks in South Africa buoyed palladium and platinum.

Brent oil gained 21 cents to $109.73 a barrel, while U.S. crude prices added 12 cents to $104.47.

(Editing by Shri Navaratnam)

By Wayne Cole

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news
Date Title
08:43p Patent Application Titled "Braking Force Control Method for Vehicle" Published Online (USPTO 20160264002)
08:43p AQUA CARPATICA : Water Purity Campaign Wins Its Category at D&AD Impact
08:42p Patent Issued for Method for Determination Or Evaluation of Test Substance (USPTO 9447466)
08:42p Global PTFE Micro Powder Market 2016- 3M, Chemours (DuPont), Shamrock Technologies, Solvay America
08:42p Global Proximity Sensors Market 2016- Honeywell International, Infineon, Itron, NXP, Sensata
08:42p WAL MART STORES : Kinsley Kinner's mom takes the stand in murder trial
08:42p YouTube Star and Author Joey Graceffa to Showcase Debut Novel ‘Children of Eden’ at Books-A-Million on Sunday, October 16
08:41p INVESTIGATORS FROM AALBORG UNIVERSITY RELEASE NEW DATA ON ATRIAL FIBRILLATION [LEFT ATRIAL THROMBUS RESOLUTION IN ATRIAL FIBRILLATION OR FLUTTER : ...
08:41p "Input Device for a Vehicle Control System" in Patent Application Approval Process (USPTO 20160265654)
08:41pDJMARKET SNAPSHOT : Stocks Pare Sharp Losses From Deutsche Bank, Fed Concerns
Latest news
Advertisement
Hot News 
-26.72%Britain's Capita feels Brexit chill as profits, shares take a hit
14.98%QUALCOMM IN TALKS TO BUY NXP SEMICONDUCTORS : Wsj
5.82%ARROWHEAD PHARMACEUTICALS : Amgen, Arrowhead Pharma Agree to Cardiovascular Collaboration
-5.86%MERLIN ENTERTAINMENTS : Security concerns deter family visits to London attractions - Merlin
7.51%ConAgra Revenue Slips as Spinoff Remains On Target
Most Read News
08:33a TI Fluid Systems looks to raise 600 million euros in London debut
09/28 U.S. APPROVES BOEING, LOCKHEED FIGHTER JET SALES TO GULF : sources
12:57p TATA STEEL : British Steel back in profit after spin-off from Tata
10:58a COMMERZBANK : As Deutsche struggles, German lawmakers say no more help for ailing banks
11:36a Relief arrives for U.S. shale firms as OPEC folds in price battle
Most recommended articles
09/26Predicting the U.S. Elections With The WMA Trump/Clinton Barometer
02:40p OCH ZIFF CAPITAL MANAGEMENT LLC : Ziff to pay $200 million to settle foreign bribery charges
02:33p BOEING NEARS WIDE-BODY JET SALE TO QATAR AIRWAYS : Bloomberg
02:32p EXCLUSIVY : Ex-Hugo Boss CEO becomes Bottega Veneta head
02:30pDJNXP SEMICONDUCTORS : Qualcomm in Talks to Acquire NXP Semiconductors -- Update