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Strong dollar hits Asian share markets, oil surges

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Asian shares have weakened on Tuesday a strong dollar demand for emerging-market assets, while rising oil prices fueled increases worries about a flare-up of inflation and faster US interest.

The prices on the market, is reflected in a glass window at the Tokyo Stock Exchange (TSE) in Tokyo, Japan, 6. February 2018. REUTERS/Toru Hanai

Europe was for a subdued start, with futures on the London FTSE index and the Euro Stoxx 50 up 0.1 percent each, but E-Minis for the S&P 500 were flat.

The Japanese Nikkei ended 0.2 percent lower, and Australian shares fell 0.7 percent. Chinese stocks in the red were also the blue-chip CSI300 off 0.5 percent.

The liquidity was relatively thin due to holidays in South Korea, and Hong Kong.

Although most of the major Asian markets edge lower, MSCI’s widest index of Asia-Pacific-managed shares outside of Japan to eke out a small 0.17 percent gain.

The index is well below an all-time peak of the 617.12 points hit in January, and is flat so far this year after a super-charged 33.5 per cent profit in the year 2017.

To flow”, we see that US dollar strength, and caused money from the emerging markets to the US There is a kind of risk-aversion,” said Yoshinori Shigemi, global market strategist at JPMorgan Asset Management.

“People are cautious on taking exposure in the emerging markets.”

These concerns are the thrust offset for the sentiment from overnight gains on Wall Street about the apparent reconciliation between the United States and China over import duties.

Analysts said investors in the region are concerned about growth prospects, which remain with the U.S. Central Bank, its policy tightening path.

“Stocks have several times rallied on the belief that the trade tensions easing, only to again fall down, because the investors took the opposite view,” said James Mcglue, executive director of stockbroking at Perth-based Argonaut.

“While the global economy remains robust and the revenue in the first quarter have been strong, the equity markets mostly sideways traded this year because many investors have begun to fear that the pace of expansion has already reached its peak.”

JPMorgan is Shigemi, said the investors now focus on the next Fed meeting on June 13, where it is widely expected that interest rates will increase for the second time this year.

A total of three walks is almost fully priced in by the market in 2018, although some investors expect the Fed to be more aggressive.

It is the fear of higher inflation and faster, the Fed was rate rises, causing a bond-market rout earlier this year, the income is considerably higher and triggering a stock market sell-off.
CURRENCIES AND OIL

The dollar hovered near five-month highs against a basket of currencies, boosted by the US-China trade optimism.

The dollar index was recently 0.1 percent to 93.56 Monday top of 94.058.

The euro eases to $1.1777 in the immediate vicinity of a more than six-month low point of $1.1715 touched on Monday amid the ongoing political risks in Italy.

Italy, the extreme right-wing League and the 5-star movement agreed on a candidate that planned coalition government to implement spending plans saw the bunch by some investors as a threat for the future viability of the country’s debt.

Italy’s 10-year bond yield jumped 8 basis points in early trading on Tuesday to a fresh 14-month high of 2.418 percent.

The Japanese yen stabilized in the vicinity of the four-month lows at 111.05 per dollar, while sterling 0.1% eased to $1.3416, as investors prepared for the most important data that could determine whether the Bank of England to raise prices in the year 2018.

Elsewhere, oil prices provide increased to the highest level since 2014 according to the Venezuela presidential elections, the country’s oil production could continue to fall.

The market is also weighing the possibility of additional U.S. sanctions against the country.

U.S. crude oil added 26 $72.50 per barrel and Brent rose 19 cents to $79.40.

The combination of higher oil and conciliatory measures on the US-China trade front strengthened the Australian dollar, a liquid proxy for risk, to a one-month peak.

As the dollar strengthened, gold prices eased, in order to stay in the vicinity of the lowest since the end of December at $1,289.68.