Euro holds gains as Asian markets losses.
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3:38:00 PM |
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Asian markets fell Monday after last week’s volatility, but the euro
held on to gains thanks to healthy economic data and hopes that German
Chancellor Angela Merkel is close to forming a government.
Investors ignored another strong lead from Wall Street, where the S&P 500 and Nasdaq chalked up fresh records on expectations of strong sales on Black Friday and Cyber Monday — the two major post-Thanksgiving shopping days.
With little to drive buying on Monday, Asian profit-takers sold up, with eyes on the release of key data in major economies this week — from China to the United States.
Shanghai slipped almost one percent, with dealers still on edge after Thursday’s sharp losses fuelled by concerns about a crackdown on speculative trading.
Hong Kong was down 0.6 percent, while Tokyo closed 0.2 percent lower. Seoul shed 1.4 percent, dragged down by Samsung Electronics’ more than five percent slump in response to Morgan Stanley’s decision to cut its price recommendation for the firm.
Singapore lost 0.2 percent and Taipei retreated one percent, but Sydney edged up 0.1 percent while Wellington put on 0.6 percent.
European markets opened down, with London, Paris and Frankfurt all losing 0.2 percent.
In currency trading the euro stood firm against the dollar, after surging on Friday in reaction to healthy economic data. A gauge of the German business climate hit an all-time high in November despite political uncertainty.
There are also hopes Merkel can hammer out a deal to form a new government for Europe’s biggest economy.
The Social Democrats said they were ready to hold talks with the chancellor, who is facing pressure to reach an agreement to end weeks of turmoil.
The euro plunged last week after talks to form a new government with the pro-business Free Democrats and the left-leaning Greens broke down, raising the prospect of fresh elections.
Adding to the upbeat euro sentiment were last week’s dovish Federal Reserve minutes that have led some traders to lower their expectations on the pace of US interest rate rises, while the European Central Bank is looking more bullish. “Too many positive developments to ignore suggests the market will set sights on the $1.2000 level,” Stephen Innes, head of Asia-Pacific trading at OANDA, said in a commentary.
“The market continues to underprice the ECB risk, but with the recent string of uproarious EU economic data, surely this will be too difficult for the ECB to ignore, and at minimum moderate their ‘lower for longer’ stance in spite of inflation undershooting expectations.” Oil prices dipped after Friday’s gains that saw West Texas Intermediate hit its highest level since July 2015 on reports Russia and OPEC could agree a deal to extend production cuts when they meet this week. “OPEC and Russia appear to be in agreement to extend the oil production cut until the end of 2018 but the final details need to be worked out this week,” said Margaret Yang Yan, market analyst at CMC Markets Singapore.
In focus this week is the congressional hearing for Jerome Powell, Donald Trump’s pick as the next Fed boss, while current governor Janet Yellen is also due to speak. Senators are also expected to vote this week on a tax reform bill, with fears that failure to pass it could batter global markets.
Tokyo – Nikkei 225: DOWN 0.2 percent at 22,495.99 (close)
Hong Kong – Hang Seng: DOWN 0.6 percent at 29,686.19 (close)
Shanghai – Composite: DOWN 0.9 percent at 3,322.23 (close)
London – FTSE 100: DOWN 0.2 percent at 7,396.69
Euro/dollar: UP at $1.1926 from $1.1925 on Friday
Pound/dollar: DOWN at $1.3321 from $1.3324
Dollar/yen: DOWN at 111.40 yen from 111.55 yen
Oil – West Texas Intermediate: DOWN 30 cents at $58.65 per barrel
Oil – Brent North Sea: DOWN 10 cents at $63.76 per barrel
New York – DOW: UP 0.1 percent at 23,557.99 (close).
Investors ignored another strong lead from Wall Street, where the S&P 500 and Nasdaq chalked up fresh records on expectations of strong sales on Black Friday and Cyber Monday — the two major post-Thanksgiving shopping days.
With little to drive buying on Monday, Asian profit-takers sold up, with eyes on the release of key data in major economies this week — from China to the United States.
Shanghai slipped almost one percent, with dealers still on edge after Thursday’s sharp losses fuelled by concerns about a crackdown on speculative trading.
Hong Kong was down 0.6 percent, while Tokyo closed 0.2 percent lower. Seoul shed 1.4 percent, dragged down by Samsung Electronics’ more than five percent slump in response to Morgan Stanley’s decision to cut its price recommendation for the firm.
Singapore lost 0.2 percent and Taipei retreated one percent, but Sydney edged up 0.1 percent while Wellington put on 0.6 percent.
European markets opened down, with London, Paris and Frankfurt all losing 0.2 percent.
In currency trading the euro stood firm against the dollar, after surging on Friday in reaction to healthy economic data. A gauge of the German business climate hit an all-time high in November despite political uncertainty.
There are also hopes Merkel can hammer out a deal to form a new government for Europe’s biggest economy.
The Social Democrats said they were ready to hold talks with the chancellor, who is facing pressure to reach an agreement to end weeks of turmoil.
The euro plunged last week after talks to form a new government with the pro-business Free Democrats and the left-leaning Greens broke down, raising the prospect of fresh elections.
Adding to the upbeat euro sentiment were last week’s dovish Federal Reserve minutes that have led some traders to lower their expectations on the pace of US interest rate rises, while the European Central Bank is looking more bullish. “Too many positive developments to ignore suggests the market will set sights on the $1.2000 level,” Stephen Innes, head of Asia-Pacific trading at OANDA, said in a commentary.
“The market continues to underprice the ECB risk, but with the recent string of uproarious EU economic data, surely this will be too difficult for the ECB to ignore, and at minimum moderate their ‘lower for longer’ stance in spite of inflation undershooting expectations.” Oil prices dipped after Friday’s gains that saw West Texas Intermediate hit its highest level since July 2015 on reports Russia and OPEC could agree a deal to extend production cuts when they meet this week. “OPEC and Russia appear to be in agreement to extend the oil production cut until the end of 2018 but the final details need to be worked out this week,” said Margaret Yang Yan, market analyst at CMC Markets Singapore.
In focus this week is the congressional hearing for Jerome Powell, Donald Trump’s pick as the next Fed boss, while current governor Janet Yellen is also due to speak. Senators are also expected to vote this week on a tax reform bill, with fears that failure to pass it could batter global markets.
Tokyo – Nikkei 225: DOWN 0.2 percent at 22,495.99 (close)
Hong Kong – Hang Seng: DOWN 0.6 percent at 29,686.19 (close)
Shanghai – Composite: DOWN 0.9 percent at 3,322.23 (close)
London – FTSE 100: DOWN 0.2 percent at 7,396.69
Euro/dollar: UP at $1.1926 from $1.1925 on Friday
Pound/dollar: DOWN at $1.3321 from $1.3324
Dollar/yen: DOWN at 111.40 yen from 111.55 yen
Oil – West Texas Intermediate: DOWN 30 cents at $58.65 per barrel
Oil – Brent North Sea: DOWN 10 cents at $63.76 per barrel
New York – DOW: UP 0.1 percent at 23,557.99 (close).
