Global markets: Asia shares track Wall St higher, US dollar firm

SYDNEY - Asian shares edged higher on Tuesday while the dollar stood firm as upbeat US earnings boosted Wall Street and factory surveys in the United States and Europe boasted their best readings so far this year.

MSCI's broadest index of Asia-Pacific shares outside Japan inched up 0.1 percent with most components yet to trade.

Australian stocks added 0.5 percent and futures pointed to an opening gain of around 0.8 percent for Japan's Nikkei helped by a softening yen.

Wall Street took encouragement from upbeat corporate results and the Dow rose 0.46 percent, while the S&P 500 gained 0.47 percent and the Nasdaq or 0.91 percent.

Over one third of US companies have now reported and 80 percent have beaten market expectations. Another third of the S&P 500 components are scheduled to report earnings this week, including heavyweights Apple, Alphabet, Amazon and Boeing.

Merger and acquisition activity added an extra fizz in the wake of AT&T Inc.'s $85.4 billion bid for Time Warner Inc., though the deal seemed destined to face stringent scrutiny from regulators.

Aiding risk sentiment was the Markit survey of US manufacturing which climbed to a one-year top of 53.2. Business activity in the euro zone also expanded at the fastest pace this year so far in October and firms raised prices at the sharpest rate in more than five years.

The better news led investors to nudge up the probability of a December rate hike from the Federal Reserve to around 74 percent and pressured Treasury prices.

It also lifted the US dollar to a nine-month high against a basket of major currencies at 98.846. The dollar remained firm on the yen at 104.28 while the euro struggled at $1.0870.

One mover was the Canadian dollar which rebounded from a seven-month low after Bank of Canada Governor Stephen Poloz said the decision on whether to cut interest rates again was not one to take lightly.

The comments countered recent speculation about an imminent easing and nudged the US dollar down to C$1.3352 from a peak at C$1.3398.

In commodities, oil prices dipped on news of the impending restart of Britain's Buzzard oilfield and Iraq's wish to be exempted from OPEC production cuts.

Brent was down 30 cents at $51.48 a barrel while US crude lost 9 cents to $50.43.

source: www.abs-cbnnews.com

Stocks, gold fall as Fed hike back on the cards

HONG KONG - Asian stocks fell and the US dollar stood tall on Thursday as markets scrambled to factor in the possibility of another interest rate increase by the Federal Reserve as early as June. Gold stumbled.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.8 percent in early trade as the prospect of a second U.S. rate hike in six months raised concerns for emerging markets already grappling with a slowing China.

South Korea and Australia led regional markets lower with 0.5 and 0.6 percent falls each as investors refocused their attention on the growing differences between the health of the world's biggest economy and its global counterparts.

"In the short term, emerging markets are the most vulnerable," Steven Englander, global head of G10 FX strategy at Citibank wrote in a note to clients.

"Overall, the divergence trade is revived until further notice," he wrote in a note to clients, saying the Canadian dollar and the Aussie were vulnerable due to concerns around those economies.

Japan's Nikkei rose early thanks to a weaker yen, which fell to a three-week low against the dollar after minutes of the last Fed meeting suggested a rate increase is firmly on the table at its policy review next month. But the Nikkei later pared its gains to just 0.2 percent.

The Fed minutes noted Fed officials said it would be appropriate to raise interest rates in June if economic data points to stronger second-quarter growth as well as firming inflation and employment.

Such views helped revive the prospect of a rate hike in June, which had been dismissed by many investors.

CME fed fund futures showed that the probability of a June rate increase by the Fed rose to 34 percent after the release of the FOMC minutes on Wednesday from 19 percent earlier in the day, 15 percent on Tuesday, and less than 1.0 percent a month ago, according to CME group's FedWatch.

Still, many in the market are still sceptical the Fed would raise rates ahead of Britain's June 23 referendum on whether to remain in the European Union, a risk that was pointed out by some Fed policymakers. July may be a stronger possibility.

The dollar index hovered just below a seven-week high of 95.27 scaled overnight, boosted by sharply higher U.S. Treasury yields.

The benchmark 10-year Treasury note yield jumped more than 10 basis points on Wednesday while the yield curve steepened slightly, breaking a multi-month streak of flattening.

The greenback was steady at a three-week high of 110.25 against the yen hit overnight. The euro was pinned down near $1.1214 , its lowest since late March.

"With April activity indicators consistent with a healthy bounce-back in growth, we see risks of two rate hikes in 2016, with the first coming in the June/July time horizon," strategists at Barclays said.

Fed Vice Chairs William Dudley and Stanley Fischer are due to speak later in the day and the markets will be eager to get more details on the Fed's thinking.

Gold took the renewed expectations of a U.S. rate hike on the chin. Prices for the precious metal are inversely correlated to monetary policy easing, fell 0.1 percent to a three-week low $1256 per ounce.

The stronger dollar also weighed on commodities such as oil, which saw U.S. crude futures lose 0.4 percent to $48.00 a barrel. A stronger dollar tends to put non-U.S. buyers of greenback-denominated commodities at a disadvantage.

Three-month copper on the London Metal Exchange fell to as low as $4563.50 overnight, the weakest since Feb. 19 and was hovering near those levels.

source: www.abs-cbnnews.com