Friday, June 12, 2015
Asia shares, euro numbed by Greek drama
SYDNEY - Asian shares had a muted session Friday as Greek debt talks took yet another confusing turn, while the dollar held firm in the wake of reassuringly upbeat U.S. retail data.
Activity was sparse with MSCI's index of Asia-Pacific shares outside Japan up 0.2 percent, but only just above three-month lows. Japan's Nikkei barely budged, though it found some support in a dollar bounce against the yen.
China's market built on its long bull run as the Shanghai index rose 0.8 percent to its loftiest level since early 2008, with property shares firmer on signs of a revival in real estate demand.
Wall Street had been tentative on Thursday with the Dow ending up 0.22 percent, while the S&P 500 added 0.17 percent and the Nasdaq 0.11 percent.
Sentiment was bolstered by a solid rise in U.S. retail sales which, combined with upward revisions, suggested the economy was warming nicely after a chilly start to the year.
If the momentum is sustained, the Federal Reserve could begin to hike interest rates later in the year, with September increasingly seen by markets as the lift-off date.
All of which sets the scene for the Fed's meeting on June 16 and 17 which will include a news conference from Chair Janet Yellen.
"We don't think the Fed will explicitly reference September, but we do think they will harp on their data dependence and give a nod that a hike this year is likely if the data remain constructive," said Tom Porcelli, chief economist at RBC Capital Markets.
"And so far both the data and the market are on the right track."
The improving U.S. data helped the dollar index up to 95.173, and away from a near one-month low of 94.322 set on Wednesday. Against the yen, the greenback bought 123.46 yen, well off this week's trough of 122.46.
The euro had less luck as talks on Greece showed no sign of reaching a deal. The single currency was off at $1.1232, from a high of $1.1387 set on Wednesday.
The dip followed the International Monetary Fund's surprise decision to leave negotiations in Brussels and fly home because of major differences with Athens.
The move came as the European Union told Greek Prime Minister Alexis Tsipras to stop gambling with his country's future and take crucial decisions needed to avert default.
Adding to the air of caution, German newspaper Bild reported Berlin was holding "concrete consultations" on what to do in the case of a bankruptcy of the Greek state, citing several people familiar with the matter.
This includes discussions about introducing capital controls in Greece if the crisis-stricken country goes bankrupt.
In commodity markets, oil prices dipped after Saudi Arabia said it was ready to raise output further to meet strong demand.
Brent crude oil for July fell 38 cents to $64.73 a barrel, while U.S. crude lost 45 cents to $60.32.
source: www.abs-cbnnews.com