Investors await US inflation information as Asian, European markets weaken

Asian and European markets have been blended Monday after final week’s poor run as traders stay up for the discharge of key US inflation information, whereas eyes are on Japan because the yen sits round three-decade lows.

A forecast-topping learn on the US providers sector offered additional proof that the world’s high economic system remained in impolite well being and dealt a blow to hopes for rate of interest cuts.

Asian markets obtained off to a weak begin for the week, with Shanghai, Sydney, Seoul, Taipei and Wellington all in destructive territory.

Hong Kong was flat, whereas Tokyo, Bangkok, Mumbai, Singapore, Manila and Jakarta edged larger.

London, Paris and Frankfurt rose.

Investors are additionally monitoring developments in Japan because the yen struggles in opposition to the greenback, main the nation’s high foreign money official to warn that authorities have been able to step in to supply assist.

The Japanese unit is approaching the 160.17 per greenback mark that pressured authorities to intervene in foreign money markets earlier within the yr.

The motion led Vice Finance Minister Masato Kanda to say officers have been able to step in 24 hours a day.

“If there are excessive currency fluctuations, it has a negative impact on the national economy,” he mentioned.

“In the event of excessive moves based on speculation, we are prepared to take appropriate action.”

The feedback have helped maintain the yen beneath 160 however US fee uncertainty was placing recent strain on the unit.

The Japanese central financial institution’s cautious method to tightening financial coverage, mixed with the Fed protecting rates of interest at two-decade highs, is placing strain on the yen.

“Perhaps if the Bank of Japan got on with things it wouldn’t require direction intervention in the FX markets to prop up the yen — it never works for very long anyway,” mentioned Neil Wilson at Finalto buying and selling group in a commentary.

IG Australia’s Tony Sycamore tipped authorities to step in “after yen triggers buy orders perched above the late April 160.20ish high”.

A surge within the tech sector has helped push markets to file or multi-year highs, however issues that the shopping for has gone too far have set in and profit-taking has weighed on equities in current weeks.

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That noticed Wall Street finish broadly decrease Friday, with the better-than-expected learn on the US providers sector, which is at a greater than two-year excessive, weighing on sentiment.

The subsequent main indicator will come on the finish of this week with the private consumption expenditures index — the Federal Reserve’s most popular gauge of inflation — which may play a key position within the financial institution’s plans for financial coverage.

Decision-makers have pushed again in opposition to hypothesis they might minimize rates of interest in September, with some even suggesting they’re completely happy to maintain them elevated into the brand new yr.

– Key figures –

Tokyo – Nikkei 225: UP 0.5 % at 38,804.65 (shut)

Hong Kong – Hang Seng Index: FLAT at 18,027.71 (shut)

Shanghai – Composite: DOWN 1.2 % at 2,963.10 (shut)

London – FTSE 100: UP 0.3 % at 8,263.87

Dollar/yen: UP at 159.69 yen from 159.61 yen on Friday

Euro/greenback: UP at $1.0711 from $1.0697

Euro/pound: UP at 84.64 pence from 84.53 pence

Pound/greenback: UP at $1.2655 from $1.2651

West Texas Intermediate: Up 0.2 % at $80.88 per barrel

Brent North Sea Crude: UP 0.2 % at $84.53 per barrel

New York – Dow: UP 0.1 % at 39,150.33 (shut)



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