Asian stocks struggled on Friday to follow Wall Street’s euphoria about a possible U.S. rate cut next month as anxiety over Sino-U.S. trade negotiations clouded investor sentiment in the region.
Asian Stocks
- MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.1%.
- The Shanghai Composite Index rose 0.4%.
- Australian stocks declined 0.3%.
- Japan’s Nikkei shed 0.2% amid the yen’s big surge.
- The S&P 500 hit a record high on Thursday after this week’s Federal Reserve
Currency Markets
In currency markets, the prospect of U.S. interest rates being lowered put the dollar squarely on the defensive.
- The dollar index against a basket of six major currencies fell to a two-week low of 96.495. The index has shed roughly 1% this week.
- The greenback has fallen 1.3% versus the yen this week and slid to a six-month low of 107.12 yen on Friday.
- The euro was a touch higher at $1.1302 after popping up to an eight-day high of $1.1317 in the previous session. The single currency was headed for a weekly gain of 0.8%.
Bonds
- The benchmark 10-year U.S. Treasury yield surged in price and its yield fell below 2% for the first time in 2-1/2 years on Thursday. It last stood at 2.007%.
- The German 10-year bund yield touched a record low of minus 0.329% this week while Japan’s 10-year yield fell to a near three-year trough of minus 0.185% overnight.
Commodities
In oil markets, crude rose to three-week highs after Iran shot down a U.S. military drone, raising fears of about fresh conflict in the Middle East and supply constraints.
- U.S. crude oil futures were up 0.68% at $57.46 per barrel after rallying more than 5% the previous day.
- Spot gold advanced to a six-year high of $1,410.78 an ounce as the prospect of lower U.S. interest rates helped boost the non-yielding precious metal. Gold has soared nearly 5% this week.
