Advertisment Asian shares were mixed on Wednesday as weaker-than-expected U.S. ISM services data lowered the chances the Federal Reserve will hike rates this month.
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Emerging market shares led the charge, touching their strongest levels since July 2015 as investors sought yield with interest rates likely to stay low for a prolonged period.
European shares fell on Tuesday, dropping back from their highest levels since January, hit by weak US data and a slump in France’s Ingenico Group, which led Europe’s tech sector.
The S&P financial index, which tends to rise with expectations for higher rates, slipped 0.2 percent, while the S&P utilities index, which tends to benefit from a lower rate environment, rose 1.1 percent. Friday’s USA non-farm payrolls report showed employers in the United States added 151,000 jobs last month, missing economists’ expectations and falling well below readings in June and July, which both showed more than 250,000 jobs added in each month. Then ECB meets on Thursday. In contrast, no pre-election rate hike -in 1968, 2000, and 2004- has been less than 90% discounted by the fed funds futures market by the time of the meeting, he said. This helped lift MSCI’s all-country world index to its highest since August 2015.
Investors will wait until they get more clarity on presidential elections, the quality of third-quarter earnings and the timing of the next rate hike, Courtney said.
The euro skidded 0.6 percent to 114.10 yen EURJPY= after falling as low as 113.815 earlier.
Hawkish statements from Fed Chair Janet Yellen and Vice Chair Stanley Fischer last week increased expectations before the jobs data that the USA central bank is closer to raising rates.
It had tumbled more than 1 percent against its Japanese counterpart on Tuesday.
“Clearly, this is a challenging environment for the dollar”, said Petr Krpata, currency strategist at ING.
Declining U.S. yields undermined the dollar against other currencies and precious metals.The dollar slumped 1.38 percent on the yen on Tuesday and fell another 0.4 percent to 101.58 yen in early Wednesday trade.
Brent crude futures stood at $47.24 per barrel LCOc1 , little changed on the day but up slightly so far this week and above its low last week of $45.32.
ENERGY: U.S. benchmark crude oil lost 8 cents to $44.36 a barrel in electronic trading on the New York Mercantile Exchange.
A resurgent British pound rose to near eight-week high of $1.3445 GBP=D4 on Tuesday and held firm at $1.3424 in early Asian trade.
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Spot gold rose for a fourth straight day to a session high of $1,351.84 an ounce, a rise of 1.9 percent – its biggest gain since June 24.
