Asian shares hit four-month low Thursday

Asian shares broke support and caved to a four-month low on Thursday, as concerns grew that the Sino-U.S. trade conflict was fast morphing into a prolonged technology cold war between the world’s two largest economies.

Late Wednesday, Reuters reported the U.S. administration was considering Huawei-like sanctions on Chinese video surveillance firm Hikvision over the country’s treatment of its Uighur Muslim minority, according to a person briefed on the matter.

Asian Shares

  • Shanghai blue chips shed 1.2% in response to be near their lowest since February.
  • MSCI’s broadest index of Asia-Pacific shares outside Japan touched its lowest in four months and was last down 0.7%.
  • Japan’s Nikkei lost 0.7% and South Korea 0.3%. Also feeling the pain, E-Mini futures for the S&P 500 dropped 0.4%.

Currency

  • In currencies, constant trade friction saw the safe haven yen in demand again as the dollar dipped to 110.24 yen and away from the week’s top of 110.67.
  • The dollar fared better on the euro at $1.1151 and was steady on a basket of currencies at 98.111.
  • Sterling had troubles of its own at $1.2646, having hit a four-month low of $1.2625 overnight.
  • In commodity markets, spot gold was little changed at $1,273.12 per ounce.

Commodities

  • Oil prices added to losses suffered overnight after an unexpected build in U.S. crude inventories compounded investor worries about demand.
  • U.S. crude was last down 33 cents at $61.09 a barrel.
  • Brent crude futures lost 40 cents to $70.59.

Bonds

  • Yields on two-year Treasuries of 2.237% are also well below the current effective funds rate at 2.39%.

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