A week of gains for world stocks has come to an end today, while a sell-off in oil and core government debt eased, as talks began on trying to avert a U.S. military strike on Syria.
The safe-haven yen has struck a seven-week low against the dollar and stood near multi-year lows against the euro and pound, while shares in Europe inched lower in early deals after indexes across most of Asia had finished the day flat.
U.S. President Barack Obama said late yesterday that Russia’s offer to push Syrian President Bashar al-Assad to put chemical weapons under international control could potentially avert military action which the U.S. had been considering pursuing.
Markets are mostly in consolidation mode after substantial shifts over two previous sessions when what looked to be a rapid move towards U.S. action was halted by Russia’s plan.
In Europe, Britain’s jobs data will be in focus amid signs its economy is on the rebound. The report had not been released at the time of writing, however the it was expected that the data would indicate a slight increase in job numbers and employment.
The FTSEurofirst 300 pan-European share index remains virtually unchanged after an early trading rush, as a 0.1 percent rise on Germany’s Dax balanced falls of 0.1 and 0.3 percent on London’s FTSE and Paris’s CAC 40. The region’s core debt markets also saw a subdued start as this week’s save-haven sell-off abated. Benchmark German government bonds tracked minor gains by U.S. Treasuries, though UK assets inched back ahead of the jobs data and focus remained on Italy after its benchmark yields rose above Spain’s for the first time in a year and a half yesterday.
Political instability and worries about Italy’s banks ahead of a major health check of all Euro Zone banks by the European Central Bank in the coming months are driving the move. Rome will sell up to 11.5 billion euros of treasury bills later, ahead of a tripartite bond auction tomorrow which aims to raise 7.5 billion.
In the U.S., stock futures pointed to subdued trader sentiment on Wall Street after the S&P 500 gained for the sixth straight day.
In currencies, the dollar struck a seven-week high of 100.55 yen, while the euro briefly reached a 16-week high around 133.37.
MSCI’s broadest index of Asia-Pacific shares outside Japan has ended 0.1 percent lower but remained at a three-month high having gained more than 8 percent in the last two weeks.
In commodities, oil has recovered ground with Brent crude coming up to $111.72 a barrel from a 2-1/2-week low of $110.59. The steadier performance came after a 4-percent drop in the past two sessions. Copper has moved up to $7,185.50 a tonne, whilst gold clawed back to $1,364.50 having slid to a three-week low of $1,356.85 an ounce.
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