Investors duck for cover amid geopolitical tensions

  • The euro was up 0.4 per cent against the dollar at $1.0644. The greenback was down 0.3 per cent versus the yen, a safe-haven currency, at Ұ109.32, a five-month low. The UK pound was 0.3 per cent firmer versus the dollar at $1.2528. The dollar index, a measure of the greenback’s performance against a basket of peers, was down 0.3 per cent at 100.37.
  • The central bank of Canada left its benchmark interest rate unchanged at 0.5 per cent. The bank expects that GDP will expand 2.6 per cent this year, up from its January forecast of 2.1 per cent. The Canadian dollar gained 0.3 per cent against the US dollar to $0.7527.
  • South Africa’s rand was up 2 per cent at 13.5318 per dollar, adding to the previous session’s gain.
  • South Korea’s won gained 0.9 per cent to 1.135.75 per dollar, while the Kospi index edged up 0.2 per cent amid the escalating crisis on the Korean peninsula. President Donald Trump has warned that the US is prepared to act unilaterally if China doesn’t put pressure on the North Korean regime to reign in its nuclear programme.
  • Inventories of US crude dropped by 2.2 million barrels to 533.4 million barrels in the week ended April 7, according to the Energy Information Administration. Brent, the international crude benchmark, declined 1.1 per cent to 55.61 dollars per barrel. West Texas Intermediate, the US oil marker, settled 1 per cent lower at 52.89 dollars a barrel.
  • The yield on the 10-year US Treasury note fell 5 basis points to 2.24 per cent, while that on the 2-year bond dropped 2 basis points to 1.21 per cent. The 10-year German Bund yield slipped 1 basis point to 0.20 per cent. The yield on France’s 10-year government bond was down 4 basis points at 0.92 per cent. Yields fall as bond prices climb. Investors are increasingly worried about a possible Le Pen-Mélenchon second round run-off. Marine Le Pen, the far-right presidential candidate, wants to leave the EU and redenominate government bonds in the new franc. Jean-Luc Mélenchon, the far-left candidate, wants to renegotiate EU treaties, lower the workweek from 35 to 32 hours and introduce a 100 per cent top rate of income tax on the rich.
  • In Asia, Australia’s S&P/ASX 200 was up 0.1 per cent, the fourth straight session of gains. Hong Kong’s Hang Seng edged up 0.9 per cent, while on the mainland, China’s Shanghai Composite slipped 0.5 per cent. The Topix index in Tokyo lost 1 per cent.
  • In Europe, the pan-regional Stoxx 600 index gained 0.2 per cent to close at 381.90, the highest since December 2015. The FTSE 100 in London slipped 0.2 per cent to 7,348.99. France’s CAC 40 was marginally lower at 5,101.11.
  • In New York, the S&P 500 finished 0.4 per cent lower at 2,344.93; industrials and materials led losses. The Dow Jones Industrial Average was down 0.3 per cent at 20,591.86. The technology-focused Nasdaq Composite slipped 0.5 per cent to 5,836.16.
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