Comments
Asian shares got off to a lacklustre start on Wednesday after a plunge in oil prices dragged down US shares, while the dollar took a breather after this week’s rally.
Crude prices steadied after falling to multi-year lows on news that top oil exporter Saudi Arabia cut its US sales prices.
US election results
Investors warily tracked US election results, in which Republicans were poised to make major gains and possibly capture control of the Senate in a mid-term vote that could serve as a public referendum on President Barack Obama’s job performance.
Draghi’s leadership style
The dollar dipped as investors locked in profits after this week’s rally, while a Reuters report saying central bankers in the euro zone plan to challenge European Central Bank President Mario Draghi’s leadership style underpinned the euro.
ECB policy meet
Some members intend to raise their concerns with Draghi at the governors’ traditional informal working dinner on Wednesday before the ECB’s formal monthly rate-setting meeting on Thursday, the sources interviewed by Reuters said.
“We do not expect further easing at Thursday’s ECB meeting but it may give more insight into its new asset purchase programmes,’’ strategists at Barclays said.
Asian shares, US stocks
MSCI’s broadest index of Asia-Pacific shares outside Japan was down about 0.1 per cent in early trade, while Japan’s Nikkei stock average gave up about 0.2 per cent.
On Wall Street on Tuesday, the S&P 500 and Nasdaq Composite ended lower after the big drop in oil prices, while the Dow Jones industrial average eked out a small gain, with energy shares under pressure from low oil prices.
US trade deficit
US data on Tuesday revealed a surprise widening of the trade deficit last month, which raised speculation that the initially reported 3.5 per cent pace of third-quarter U.S. growth could be revised down. That in turn reduced the likelihood that the US Federal Reserve would hike interest rates in 2015.
The Commerce Department said the trade deficit grew 7.6 per cent to $43.03 billion, compared with a forecast of $40.00 billion among analysts polled by Reuters.
The data increased the safe-haven appeal of US Treasury notes, pushing down the benchmark 10-year yield and weighing on the dollar. The yield stood at 2.335 per cent in Asia, down from its US close of 2.342 per cent on Tuesday, when it fell as low as 2.303 per cent.
Dollar index
The dollar index was flat on the day at 87.015, after moving away from its four-year high of 87.406 touched on Monday.
The dollar was buying 113.60 yen, down slightly and well below a seven-year peak of 114.21 hit on Monday.
The euro edged up to $1.2550, moving off a two-year low of $1.2439 set on Monday and shrugging off downbeat data after the ECB news.
EC growth forecast
The European Commission on Tuesday downgraded its forecast for euro zone economic growth over the next few years, leading investors to raise bets the ECB might consider more action to stimulate the region's economy.
In commodities trading, US crude futures edged up about 0.1 per cent to $77.28 after reaching the lowest intraday price since October 2011 on Tuesday, after the Saudi move.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.