Asian shares wobble in early trade, euro sinks
Asian shares edged higher on Monday, with investors wary of a deepening crisis in Ukraine and a downbeat China manufacturing survey, while the euro touched a fresh one-year low ahead of this week’s European Central Bank meeting.
“Naturally, developments between Russia and the Ukraine will be in the cross sights. However, despite more concerning rhetoric that tensions are nearing a point of no return, we haven’t really seen a heavy bias towards defensive trading strategies today,” IG chief market strategist Chris Weston wrote in a note to clients.
Financial spreadbetters predicted flat openings in European markets, with Britain’s FTSE 100 .FTSE expected to open between 4 points higher and 7 points lower, and both Germany’s DAX .GDAXI and France’s CAC 40 .FCHI seen opening unchanged to 1 point higher.
Japan’s Nikkei stock average .N225 ended up about 0.3 percent, taking back some of the ground lost in August, when it shed 1.3 percent.
The final HSBC/Markit Purchasing Managers’ Index also dropped, slipping to 50.2 in August, roughly in line with a preliminary reading of 50.3 and only a shade above the 50-point mark that demarcates an expansion in activity from contraction.
“The economy still faces considerable downside risks to growth in the second-half of the year, which warrants further policy easing,” said Qu Hongbin, an economist at HSBC.
Speculators raised their bullish bets on the U.S. dollar for a second week to their highest in more than two years, according to data from the Commodity Futures Trading Commission released on Friday. The dollar’s net long position soared to $32.92 billion in the week ended Aug. 26. [IMM/FX]
The dollar rose slightly to 104.17 yen JPY=, moving back toward last week’s seven-month high of 104.49.
The euro, meanwhile, edged down about 0.1 percent to $1.3124 EUR= after dropping as low as $1.3119 and reaching lows unseen since early September 2013, ahead of the European Central Bank meeting on Thursday.
“The Japanese economic recovery seems weaker than initially expected. Consumption has fallen more than expected,” said Hiroshi Ono, the head of equity investment at Sumitomo Life Insurance.
Britain, Canada and Australia will also hold monetary policy meetings this week, starting with the Reserve Bank of Australia (RBA) on Tuesday.
The RBA is widely expected to keep its cash rate steady at 2.5 percent for the 13th straight policy meeting. AURATE1
In commodities trading, palladium XPD= climbed about 0.4 percent to $903.25 an ounce, near a 13-1/2 year peak of $907 hit on Friday. Spot gold XAU= fell slightly to $1,287.39 an ounce, after posting a small weekly gain.
U.S. crude CLc1 slipped about 0.2 percent to $95.81 a barrel after marking a monthly loss in August.
Source: Reuters
