Left Menu
Development News Edition

Asian shares grapple for recoveries amid talks of Fed Pause

Markets also face a test from U.S. payrolls data later in the session amid speculation the economy was heading for a tough patch after years of solid growth.

Devdiscourse News Desk | Updated: 07-12-2018 08:25 IST | Created: 07-12-2018 08:10 IST
Asian shares grapple for recoveries amid talks of Fed Pause
(Image Credit: Pixabay)

Asian shares fought to sustain the slimmest of recoveries on Friday amid speculation the Federal Reserve might be "one-and-done" with U.S. rate hikes, while oil fell anew as producers bickered over the details of an output cut.

MSCI's broadest index of Asia-Pacific shares outside Japan nudged up 0.4 percent, though that followed a 1.8 percent drubbing on Thursday.

Japan's Nikkei added 0.2 percent and Chinese blue chips 0.3 percent. E-Mini futures for the S&P 500 started firmer but were last down 0.1 percent. There was no escaping concerns over Sino-U.S. relations after the arrest of smartphone maker Huawei Technologies Co Ltd Chief Financial Officer Meng Wanzhou threatened to chill talks on some form of trade truce.

Markets also face a test from U.S. payrolls data later in the session amid speculation the economy was heading for a tough patch after years of solid growth.

Federal Reserve Chairman Jerome Powell emphasised the strength of the labour market in remarks made late Thursday.

Economists polled by Reuters forecast jobs rose by 200,000 in November after surging 250,000 in October.

"A view has developed of U.S. growth normalising a little faster than expected from the fiscal 'sugar rush', while inflationary pressures remain contained given the sharp fall in the oil price," said National Australia Bank economist Tapa Strickland.

"Payrolls will be very important in helping to validate whether the economy is indeed slowing faster than expected."

The mood in risk-asset markets brightened a little after the Wall Street Journal reported Fed officials are considering whether to signal a new wait-and-see mentality after a likely rate increase at their meeting in December.

That only added to recent feverish speculation the central bank was almost done on hiking rates given concerns on global growth and the disinflationary impact of collapsing oil prices.

Interest rate futures rallied hard in massive volumes with the market now pricing in less than one hike next year. A month ago they had been wagering on three increases.

The news helped Wall Street pare steep losses and the Dow ended Thursday down 0.32 percent, while the S&P 500 lost 0.15 percent. The Nasdaq managed to advance 0.42 percent.

FLATTENED

Treasuries extended their blistering rally, driving 10-year yields down to a three-month trough at 2.8260 percent, before last trading at 2.89 percent.

Yields on two-year notes fell a huge 10 basis points at one stage on Thursday and were last at 2.77 percent.

Investors also steamrolled the yield curve to its flattest in over a decade, a trend that has historically presaged economic slowdowns and even recessions.

"The sort of flattening of the yield curve that we have seen recently usually indicates that investors think the Fed is nearing the end of a tightening cycle, and that rate cuts may even be on the horizon," argued analysts at Capital Economics.

The seismic shock spread far and wide. Yields on 10-year paper sank to the lowest in six months in Germany, almost 12 months in Canada and 16 months in Australia.

The sea change in expectations took a toll on the U.S. dollar as bulls had been counting heavily on a steady widening rate differential to propel the currency.

The greenback eased against a basket of currencies to 96.801 , and fell to 112.70 yen from a 113.85 high at the start of the week. The euro was up around 0.5 percent on the week so far at $1.1376.

Cyber currency Bitcoin took a fresh spill to be down almost 20 percent for the week at $3,444.47.

In commodity markets, gold firmed to near a five-month peak as the dollar eased and the threat of higher interest rates waned. Spot gold stood at $1,238.44 per ounce.

Oil was less favoured, however, falling further as OPEC delayed a decision on output cuts while awaiting support from non-OPEC heavyweight Russia.

Brent futures slipped another 47 cents to $59.59 a barrel, while U.S. crude lost 31 cents to $51.18.


TRENDING

OPINION / BLOG / INTERVIEW

Post-COVID-19 Nigeria needs a robust Health Management Information System to handle high disease burden

Nigeria is among a few countries that conceptualised a health management information system HMIS in the early 90s but implementation has been a challenge till date. Besides COVID-19, the country has a huge burden of communicable and non-com...

Morocco COVID-19 response: A fragile health system and the deteriorating situation

Learning from its European neighbors, Morocco imposed drastic measures from the initial stages of the COVID-19 outbreak to try to contain its spread. The strategy worked for a few months but the cases have surged after mid-June. In this sit...

COVID-19: Argentina’s health system inefficiencies exaggerate flaws of health information system

You can recover from a drop in the GDP, but you cant recover from death, was the straightforward mindset of Argentinas President Alberto Fernndez and defined the countrys response to COVID-19. The South American nation imposed a strict...

Rwanda’s COVID-19 response commendable but health information system needs improvement

Rwanda is consistently working to improve its health information system from many years. However, it is primarily dependent on the collection and reporting of health data on a monthly basis. Besides, evaluation studies on Rwandas HIS publis...

Videos

Latest News

Health officials seek to block Trump rally in Virginia

A Virginia health official is warning of a severe public health threat if a planned campaign rally for President Donald Trump goes forward Friday evening. Dr Natasha Dwamena, a Department of Public Health district director, said in a letter...

Soccer-Bayern complete quadruple with Super Cup win over Sevilla

Bayern Munich beat Sevilla 2-1 after extra time on Thursday to lift the UEFA Super Cup and complete a quadruple under coach Hansi Flick, in the first European game played with fans in the stands since the sport returned amid the COVID-19 pa...

NEWSMAKER-U.S. climate scientist Katharine Hayhoe: people need hope

While the enormity of tackling climate change can be so overwhelming that some people shut down, presenting people with examples of how they can take action offers hope, says climate scientist Katharine Hayhoe.In a live interview with Reute...

Soccer-Flamengo call for match delay after 16 players test positive

Brazilian champions Flamengo have asked league organisers to cancel this weekends game against Palmeiras after 16 of their players tested positive for COVID-19. Seven players tested positive ahead of Tuesdays Copa Libertadores match against...

Give Feedback