💙 🔷 Not impressed by Big Tech in Q3? Explore these Blue Chip Bargains insteadUnlock them all

GLOBAL MARKETS-Faltering risk appetite hits stocks, sends Bund yields to record lows

Published 2016-06-09, 05:04 a/m
© Reuters.  GLOBAL MARKETS-Faltering risk appetite hits stocks, sends Bund yields to record lows
EUR/USD
-
USD/JPY
-
NZD/USD
-
XAU/USD
-
US500
-
JP225
-
VOD
-
GC
-
HG
-
LCO
-
CL
-
US10YT=X
-
STOXX
-
MIWD00000PUS
-

* MSCI world index down 0.4 percent, off recent highs
* Kiwi hits one-year high after RBNZ leaves rates unchanged
* U.S. crude falls from 11-mth high, gold also eases

By Anirban Nag
LONDON, June 9 (Reuters) - Global stocks retreated on
Thursday, dragged down by lower European and Japanese equity
markets, as appetite for riskier assets faltered, underpinning
demand for safe-haven German Bunds whose yields hit record lows.
The dollar hit a five-week low against the yen JPY= , hurt
by falling Treasury yields US10YT=RR amid waning expectations
that the Federal Reserve will lift interest rates anytime soon.
Those expectations saw German 10-year Bund yields hit a low of
0.034 percent, not far from negative territory in which $10
trillions worth of bonds globally already trade at.
Investors have almost priced out the chance of a rate
increase at the Fed Reserve's June 14-15 policy review, and
reduced the likelihood of a July rate hike to around 26 percent.
With worries about a possible British exit from the European
Union also gathering, investors are uncertain whether the Fed
will raise rates in the near term.
European shares .STOXX fell for a second straight day,
with a drop in Vodafone (LON:VOD) weighing on the telecom sector and
Essentra hit by a profit warning. Earlier, Japan's Nikkei
.N225 fell 1 percent, hurt by a stronger yen with financials
and banking stocks leading the losses on falling bond yields.
All of which saw the MSCI world equity index
.MIWD00000PUS , fall 0.4 percent to 1,691.84. It had scaled a
six-month high on Wednesday, when Wall Street's benchmark S&P
500 .SPX was just shy of all time closing highs, bolstered in
part by the Fed's stance and a recent weakness in the dollar.
"The weaker dollar is overall bad for European companies and
... the Brexit vote means there will be a lot of uncertainties
in the mid term," Jerome Schupp, head of research at SYZ Asset
Management in Geneva.
In the currency market, apart from the dollar being the
talking point, the New Zealand dollar NZD=D4 was in the
limelight, soaring to a one-year high after the nation's central
bank kept rates steady as expected, even as some in the market
had wagered on a cut.
On the other hand, the Bank of Korea unexpectedly cut its
policy rate to a record low 1.25 percent amid weak inflation and
stagnant exports. The BOK may also be looking to cushion the
economy as the government drives a major overhaul of the
struggling shipping and shipbuilding industries that could see
large job losses. FALLS
The euro retreated from one-month peak of $1.1416 EUR= ,
hurt partly by falling German Bund yields and amid uncertainty
stemming from Britain's June 23 referendum on whether to leave
the European Union.
In commodities, U.S. crude oil CLc1 fell 0.3 percent to
$51.08 a barrel after hitting a 11-month high of $51.67 a
barrel. Brent crude LCOc1 rose as high as $52.86 a barrel,
highest since October 2015, but was last trading lower at $52.23
a barrel.
Spot gold XAU= dropped after hitting a three-week high of
$1,266.01 an ounce, while aluminium CMAL3 fell 1 percent after
climbing to a one-month high of $1,614.50 a tonne. Copper
CMCU3 also fell.
"I think gold is going to stay range bound until we see more
confirmation. We need more confirmation from labour market data
in the U.S. that we get in a month from now. The market wants to
see at least two data points," said Dominic Schnider of UBS
Wealth Management in Hong Kong.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.