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Asia markets mixed as traders await Fed guidance

Monday 03:50 BST

What you need to know

  • Euro holds at two-year high
  • Dollar hovers at 13-month low
  • Gold at four-week high

Asia-Pacific equities were mixed as the euro held at two-year highs and the US dollar remained weak ahead of the Federal Reserve’s policy meeting later this week.

Hot topic

The euro was up 0.1 per cent against the dollar at $1.1669 after climbing to its highest since August 2015 following comments on Thursday from the president of the European Central Bank lacking further clues on policy normalisation.

The dollar was languishing at a 13-month low on concerns over an expansion of the probe into possible collusion between the Russian government and Donald Trump’s presidential campaign. There were also concerns over Mr Trump’s ability to deliver on his economic agenda.

The dollar index, a measure of the greenback against a basket of peers, was 0.1 per cent stronger at 93.910, but hovering around its lowest since June 2016.

“This scenario is going to remain for some time in coming days until this [week’s] Federal Open Market Committee meeting where we are going to be looking for more hawkish comments,” said Margaret Yang, market analyst with CMC Markets Singapore.

The Japanese yen was 0.1 per cent stronger against the dollar at ¥110.99.

Equities

In Asia-Pacific equities, Japan’s Topix index was down 0.9 per cent, pulled lower by the financials and industrials sectors, which fell 1.2 per cent and 0.9 per cent, respectively.

Australia’s S&P/ASX 200 was 1 per cent lower with financials and industrials each down 1.2 per cent.

Hong Kong’s Hang Seng Index was up 0.5 per cent as the financial sector rose 0.5 per cent and casino stocks gained ahead of data on visitor arrivals to Macau.

State-run telco China Unicom gained as much as 2.8 per cent after Reuters reported that Baidu and JD.com will join fellow Chinese tech names Alibaba and Tencent to invest around $12bn in its Shanghai-listed unit as part of ownership reforms for state-run enterprises.

The Shanghai Composite was up 0.3 per cent while the Shenzhen Composite was flat.

Fixed income

The 10-year US Treasury yield, which moves inversely to price, was down 2.8 basis points at 2.230 per cent. The yield on 10-year Japanese government bonds was flat at 0.060 per cent while that for Australian sovereign bonds was down 3.4 bps at 2.660 per cent.

Commodities

Brent crude, the international oil benchmark, was flat at $48.05 a barrel after settling 2.5 per cent lower on Friday amid concerns over the effectiveness of Opec-led production cuts in reducing global oversupply. Six ministers from Opec and non-Opec countries will meet today in Russia to assess the impact and effectiveness of the deal to cut production.

West Texas Intermediate, the US marker, was off 0.1 per cent at $45.73 a barrel.

Gold was hovering at a four-week high of $1,254.77 an ounce after gaining 2.1 per cent last week amid political uncertainty in the US.

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