Asian shares slip, Euros rebounded from six weeks low on Italy's budget report

Asian shares slipped on Wednesday as oil prices near four-year highs threatened to roil emerging economies, while the euro rebounded from six-week lows on reports Italy will reduce its budget deficit more quickly than expected.

Spreadbetters pointed to a firm start for the European markets amid hopes Rome could stave off a debt blow-out. E-Minis for the S&P 500 and the Dow were up 0.1 per cent, while E-Stoxx 50 added 0.2 per cent.

The euro was boosted by a report published by the Corriere Della Sera newspaper, saying Italy would reduce its budget deficit to 2 per cent of gross domestic product (GDP) by 2021.

The report came after the coalition government said last week that it planned to run a deficit of 2.4 per cent over the next three years, in a move that tripled the previous target and worried investors in both Italy and the European Union.

"The big market mover in the last 24 hours has been Italy and the concerns around its debt so the latest news is being considered a much better outcome than was priced into the market," said Kyle Roda, a Melbourne-based analyst at IG.

"The news has prompted some buying, we're seeing a bit of a relief rally."

The euro jumped 0.3 per cent on the news to $1.1585, snapping five straight days of losses that had pushed it to a six-week trough of $1.1506.

Italian BTP futures opened 98 ticks higher while German Bund Futures slipped as the spread between the two narrowed.

Sentiment in Asia remained jittery in Asia as investors considered how a new trade pact between the United States, Mexico and Canada could impact the ongoing U.S.-Sino tariff warm as it contained a clause forbidding deals with non-market countries, like China.

MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.2 per cent with Hong Kong's Hang Seng index down 0.4 per cent.

Japan's Nikkei closed 0.7 per cent lower while Indonesian shares fell 0.4 per cent and India's Nifty 50 faltered 0.8 per cent.

China's financial markets are closed for the National Day holiday and will resume trade on Oct. 8. South Korea was also closed for a public holiday.

Chinese markets have been hammered this year as investors worry that the trade row with the United States could crimp economic growth.

The dollar index, which measures the greenback against a basket of major currencies, was last at 95.343, pulling back from six-week highs of 95.744 set on Tuesday.

Gold traded near its highest level in more than a week as investors sought refuge in the safe haven asset after equity markets weakened. Spot gold was last at 1,204.79 after adding 1.3 per cent to $1,208.23 an ounce overnight.

Oil prices held close to four-year highs on supply worries due to Washington's sanctions on Iran.

The firmer oil has hit the Indian rupee and Indonesia's rupiah as the two nations import most of their oil and are heavily exposed to fluctuations in oil prices and the U.S. dollar.

Brent rose 7 cents to $84.87 per barrel, not far from a four-year high of $85.45 touched earlier in the week. U.S. crude inched 9 cents up to $75.32 a barrel, after earlier touching a four-year high of $75.91.

(With inputs from agencies.)