Geopolitical tensions lure investors out of assets perceived as risky

  • The euro was up 0.1 per cent against the dollar at $1.0607. The US currency was 1.2 per cent softer versus the yen at Ұ109.65, a five-month low. Sterling was 0.6 per cent stronger against the greenback at $1.2490 after data showed that UK annual inflation remained steady, at 2.3 per cent in March. The dollar index, a measure the greenback’s value against a basket of peers, was down 0.3 per cent at 100.72. The South African rand gained 0.9 per cent to 13.8264 per dollar. South Korea’s won weakened 0.3 per cent to 1,147.39 amid tensions with North Korea.
  • The yield on the 10-year US Treasury note slipped 7 basis points to 2.29 per cent, while that on the more policy-sensitive 2-year bond was down 3 basis points at 1.24 per cent. The German 10-year Bund yield was flat at 0.21 per cent. The yield on the equivalent maturity French bond was up 3 basis points at 0.95 per cent, after a surge in support for the far-left firebrand presidential candidate Jean-Luc Mélenchon, who has radical economic policies. Opinion polls put Mr Mélenchon within touching distance of making it to the second round run-off in May, knocking out from the presidential race the centrist, pro-European candidate Emmanuel Macron. That possibility unnerves investors, who demand a higher premium for holding French bonds over German debt.
  • In Asia, Australia’s S&P/ASX 200 closed up 0.3 per cent. Hong Kong’s Hang Seng slipped 0.7 per cent. On the mainland, China’s Shanghai Composite advanced 0.6 per cent. The Topix index in Tokyo fell 0.3 per cent as the yen gained. South Korea’s Kospi index closed 0.4 per cent lower.
  • The pan-European Stoxx 600 index closed fractionally lower at 381.18. The UK’s FTSE 100 gained 0.2 per cent to 7,365.50.
  • Major US equities indices were dragged into the red after President Donald Trump reiterated that the US was prepared to act unilaterally against North Korea if necessary. The S&P 500 finished down 0.1 per cent at 2,353.78; the technology and financial sectors led the session’s losses. The Dow Jones Industrial Average was fractionally lower at 20,651.30. The technology-focused Nasdaq Composite slipped 0.2 per cent to 5,866.77.
  • Brent, the international crude benchmark, settled at 56.01, up 0.1 per cent. West Texas Intermediate, the US oil benchmark, was up 0.2 per cent at 53.18 dollars a barrel.
  • Photo: photo: Luke Ma

WPJ

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