🔮 Better than the Oracle? Our Fair Value found this +42% bagger 5 months before Buffett bought itRead More

GLOBAL MARKETS-Asia stocks mixed, dollar struggles to rally

Published 03/08/2020, 03:18 pm
Updated 03/08/2020, 03:24 pm
© Reuters.
EUR/USD
-
USD/JPY
-
UK100
-
XAU/USD
-
JP225
-
BARC
-
GC
-
LCO
-
UK100
-
ESM24
-
CL
-
EU50
-
KS11
-
MIAPJ0000PUS
-
CSI300
-

* Asian stock markets : https://tmsnrt.rs/2zpUAr4

* Asia ex-Japan dips, Nikkei aided by yen pullback

* Caixin China PMI beats forecasts at 52.8

* Dollar adds to Friday bounce, after punishing July

* Gold reaches new peak, eyeing $2,000 level

By Wayne Cole

SYDNEY, Aug 3 (Reuters) - Asian share markets turned mixed on Monday as U.S. lawmakers struggled to hammer out a new stimulus plan amid a global surge of new coronavirus cases, though a squeeze on crowded short positions left the dollar clinging to a tentative bounce.

Sentiment was helped by a survey showing China's factory activity expanded at the fastest pace in nearly a decade in July, with the Caixin/Markit PMI at 52.8. lifted Chinese blue chips 1.0% .CSI300 . MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dipped 0.5%, though that was from a six-month top.

Japan's Nikkei .N225 added 2.1% courtesy of a pullback in the yen, while South Korea shares .KS11 were flat.

E-Mini futures for the S&P 500 ESc1 , EUROSTOXX 50 futures STXEc1 and FTSE futures FFIc1 were all little changed.

Investors were nervous at the lack of a new stimulus package in the United States with White House Chief of Staff Mark Meadows not optimistic on reaching agreement soon on a deal. Friday, Fitch Ratings cut the outlook on the United States' triple-A rating to negative from stable, citing eroding credit strength and a ballooning deficit. credit rating agency also said the future direction of U.S. fiscal policy depends in part on the November election and the resulting makeup of Congress, cautioning there is a risk policy gridlock could continue.

Strong results from tech giants helped the S&P 500 climb 5.5% last month, while the NASDAQ rose 6.8%. Other sectors, however, did not fair nearly as well as many states rowed back on opening their economies in the face of surging infections. .N

"Amid improvements in business sentiment, signals are emerging that the initial boost from pent-up demand is fading and consumer confidence is slipping lower," wrote economists at Barclays (LON:BARC) in a note.

"Together with concerns about labour market and virus developments, this clouds the outlook and could be exacerbated if U.S. fiscal support is not renewed in time."

Much will depend on what key data show this week including the ISM survey of manufacturing later on Monday and the crucial payrolls report on Friday.

The uncertainty saw benchmark 10-year Treasury yields US10YT=TWEB hit their lowest since March at 0.52% last week and were currently just a fraction higher at 0.54%.

The 10-year real rate has broken below -1% for the first time amid a marked flattening of the yield curve as investors wager on yet more accommodation from the Federal Reserve.

That took a heavy toll on the U.S. dollar which suffered its worst monthly drubbing in a decade in July, though it was attempting a rally on Monday as bears took profits on crowded short positions. USD/

The dollar was last at $1.1780 per euro EUR= , with the single currency having gained 4.8% in July to stretch as far as $1.1908. Against a basket of currencies, the dollar stood at 93.423 having touched its lowest since May 2018 on Friday at 92.538.

The dollar steadied on the yen at 105.81 JPY= after hitting a 4-1/2-month low last week at 104.17.

It had bounced in part when Japanese Finance Minister Taro Aso described the yen's recent rise as "rapid", signalling concern that a strong currency could add pain to an export-led economy already in recession. L3N2F21AN

The decline in the dollar combined with super-low real bond yields has been a boon for gold, which boasted its biggest monthly gain since February 2016.

The metal made a fresh peak early Monday at $1,984 an ounce XAU= and seemed on track to take out $2,000 soon. GOL/

Oil prices eased on concerns about oversupply as OPEC and its allies, together known as OPEC+, are due to pull back from production cuts in August while an increase in COVID-19 cases worldwide raised fears of slower pick-up in fuel demand. O/R

Brent crude LCOc1 futures dipped 17 cents to $43.35 a barrel, while U.S. crude CLc1 eased 22 cents to $40.05.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Asia stock markets

https://tmsnrt.rs/2zpUAr4 Asia-Pacific valuations

https://tmsnrt.rs/2Dr2BQA

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Lincoln Feast and Sam Holmes)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.