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Yen climbs as treasury yields decline


  • Markets
  • Tuesday, 29 May 2018

SYDNEY: Ten-year Treasury yields fell, taking the dollar down against the yen, after Italy’s political impasse triggered a risk-off mood in holiday-hit markets. Oil prices retreated further, sending West Texas crude to its lowest in six weeks.

Stocks declined, with shares of iPhone screen makers tumbling on a report that Apple Inc. is shifting to next-generation technology. The stronger yen left the Topix index of shares with a seventh straight session of declines, the longest losing streak since September 2016. 

FTSE 100 futures declined in early London trading as U.K. traders return following a holiday. Ten-year Treasury yields fell below 2.90 percent for the first time this month, while U.S. equity futures were flat. 

Investors have started the week with geopolitics to the fore. U.S. negotiations with North Korea have proved unpredictable, and political turmoil in Italy and -- to a lesser extent -- Spain have refreshed memories of the euro zone’s woes of the past decade. Pro- and anti-European forces are at loggerheads in Italy where another election is expected as early as September after parties have failed to form a government since a March poll.

“These developments are concerning,” Alessio de Longis, a New York-based portfolio manager at Oppenheimer Funds Inc., told Bloomberg Television in regard to Italy’s political landscape. 

“The market has taken a completely different tone, it no longer believes what the parties are saying. The markets will be really unable to move forward into a different narrative” until the Italian outlook is clearer, he indicated.

Elsewhere, Italy’s bonds extended declines with the country poised for fresh elections following the failure to set up a government. The Turkish lira held overnight gains after the central bank took steps to simplify its monetary policy.

Many Southeast Asian markets are closed for holidays Tuesday, including Singapore, Indonesia, Malaysia and Thailand. The U.S. and U.K. were closed Monday.
Terminal users can read more in Bloomberg’s Markets Live blog.

These are some key events to watch this week:

• EU trade chief Cecilia Malmstrom and U.S. Commerce Secretary Wilbur Ross are scheduled to meet Wednesday in an informal World Trade Organization ministerial in Paris.

• The U.S. employment report for May is due Friday. It’s the last before the June Fed meeting.

• Automakers report May U.S. sales the same day.

• Also Friday: China’s stock market joins MSCI Inc.’s global indexes. 

• On Saturday U.S. Secretary of Commerce Wilbur Ross will travel to Beijing for more talks with Vice Premier Liu He on topics including ZTE Corp. and trade. 

These are the main moves in markets:

Stocks

• Topix index fell 0.5 percent at the close in Tokyo.

• S&P/ASX 200 Index rose 0.1 percent. 

• Kospi index lost 0.7 percent. 

• Hang Seng Index declined 0.6 percent. 

• Shanghai Composite Index fell 0.5 percent. 

• Futures on the S&P 500 Index were little changed.

• FTSE 100 futures slid 0.5 percent.

• MSCI Asia Pacific Index fell 0.3 percent.

Currencies

• The Bloomberg Dollar Spot Index lost 0.1 percent. 

• The Japanese yen gained 0.4 percent to 109.02 per dollar.

• The euro added 0.1 percent $1.1639.

• The British pound gained 0.1 percent to $1.3323.

Bonds

• Then 10-year U.S. Treasury yield declined about three basis points to 2.90 percent, after falling below that mark earlier.

• The 10-year Australian bond yield fell about four basis points to 2.71 percent. 

• Germany’s 10-year bund yield was steady at 0.35 percent. 

Commodities

• West Texas Intermediate crude decreased 1.5 percent to $66.89 a barrel, heading for a fifth consecutive decline.

• Gold was little changed at $1,299.46 an ounce. - Bloomberg 

Markets , Forex , treasuries , yen

   

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