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GLOBAL MARKETS-Asian shares steady as global bond sell-off eases; sterling rises

Published 10/10/2018, 05:20 pm
Updated 10/10/2018, 05:30 pm
© Reuters.  GLOBAL MARKETS-Asian shares steady as global bond sell-off eases; sterling rises
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* Long-dated Treasury yields scale back from multi-year highs

* Wall St stocks mixed, uncertainty prevails in Asia

* Spreadbetters see European shares opening lower

* Sterling strengthens on hopes for Brexit deal

By Tomo Uetake

TOKYO, Oct 10 (Reuters) - Asian shares staged a mild rebound on Wednesday after world stocks hit eight-week lows the previous day on worries about global economic growth, although the British pound stayed firm on hopes for a Brexit deal.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.3 percent, while Japan's Nikkei average .N225 added 0.2 percent and the Australian benchmark .AXJO was up just 0.1 percent.

In China, the mainland benchmark Shanghai Composite .SSEC was flat in choppy trade, although Hong Kong's Hang Seng advanced 0.6 percent.

With world stocks still near to multi-week lows, financial spreadbetters expect London's FTSE .FTSE to open 12 points lower, Frankfurt's DAX .DAX to fall 23 points, and Paris's CAC .FCHI to dip 3 points.

"As uncertainty continues to prevail in financial markets across the world, many investors are staying on the sidelines until more clarity emerges in U.S. Treasury and Chinese markets," said Yasuo Sakuma, chief investment officer at Libra Investments.

Benchmark U.S. 10-year Treasury yields US10YT=RR touched a 7-1/2-year peak of 3.261 percent and those on 30-year bonds US30YT=RR hit their highest in more than four years, but later fell back. traders say comments from U.S. President Donald Trump on Tuesday helped curb the rise in Treasuries' yields. He said the Federal Reserve was going too fast in raising rates when inflation was minimal and government data pointed to a strong economy. government bond yields also fell from multi-year highs after Economy Minister Giovanni Tria pledged to do whatever is necessary to restore calm if market turbulence turns into a financial crisis. stock markets were uneventful. The Dow Jones Industrial Average .DJI fell 0.21 percent while the S&P 500 .SPX and the Nasdaq Composite .IXIC were little changed.

The MSCI All-Country World index .MIWD00000PUS , which tracks shares in 47 countries, hit its lowest level since August 16 overnight. It last traded up 0.2 percent on the day.

The International Monetary Fund cut its global economic growth forecasts for 2018 and 2019, as well as its U.S. and China estimates for next year, saying the two countries would feel the brunt of the impact of their trade war next year. dollar dipped due to a fall in U.S. bond yields after touching a seven-week peak against a basket of currencies. The dollar index .DXY last traded flat at 95.560.

Sterling GBP=D3 continued to gain after a report rekindled hopes that Britain and the European Union are on the brink of a Brexit deal. It last traded up 0.2 percent at $1.3172. can't be too optimistic about the Brexit process, because even if a deal can be struck at an anticipated special EU summit in November, it has to get through the British Parliament," said Kengo Suzuki, chief FX strategist at Mizuho Securities.

The offshore yuan CNH=D4 rose 0.1 percent to 6.9200 after falling earlier this week to as low as 6.9371 to the dollar, its weakest since mid-August.

Sentiment was calm in the spot market CNY=CFXS , where the yuan opened at 6.9220 per dollar and was changing hands at 6.9209 by midday, 51 pips stronger than the previous late session close.

But in the long run, analysts expect the Chinese currency to trend lower amid economic slowdown fears, with current and former central bank officials downplaying the significance of the yuan breaking through the psychologically important 7 level.

Oil prices dropped on Wednesday after the IMF lowered its global growth forecasts, although prices were somewhat supported as Hurricane Michael churned towards Florida, closing down nearly 40 percent of U.S. Gulf of Mexico crude output. O/R

U.S. crude CLcv1 oil futures dropped 0.4 percent to $74.68 a barrel and Brent crude LCOc1 futures eased 0.2 percent to $84.86 a barrel.

Gold prices XAU= edged up 0.1 percent as investors remained cautious after U.S. Treasury yields hit then retreated from multi-year highs. GOL/

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ MSCI, Nikkei datastream chart

http://reut.rs/2sSBRiD IMF global GDP growth

https://tmsnrt.rs/2ykjmXG 10-yr US yields vs S&P 500 in 2018

https://tmsnrt.rs/2ytikZs CNH

https://reut.rs/2ysJRdO

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