Asian shares head for third week of losses on China woes, US rates

Sydney, Aug.18 (BNA): Asian markets were trying to find a firmer footing on Friday after a rough week, hammered by concerns about China’s ailing economy and fears of U.S. rates staying higher for longer as long-term bond yields surged.

 

MSCI’s broadest index of Asia-Pacific shares outside Japan were up 0.1 per cent after hitting a nine-month low the session before. It was, however, headed for a weekly loss of 2.8 per cent, the third straight week of declines.


Elsewhere, Treasuries rallied a little after being heavily sold off for the past five weeks. Ten-year yields eased 5 basis points to 4.2564 per cent in Asia, after touching a 10-month top of 4.3280 per cent on Thursday.


30-year yields also fell 4 basis points to 4.3684 per cent and off from a 12-year high of 4.426 per cent hit overnight.


A strong run of U.S. economic data, including a fall in weekly jobless claims on Thursday, suggested the world’s largest economy is not slowing as desired in the face of high borrowing costs, prompting traders to scale back rate cuts bets next year.


The Atlanta Federal Reserve’s GDPNow forecast model suggested the U.S. economy is likely to grow at a 5.8 per cent annualised rate in the third quarter, up from previous forecast of 5 per cent.


In currency markets, the dollar lost some of its shine on Friday, but still managed to hold recent gains after hitting a six-week top.


The Japanese yen regained posture, up 0.3 per cent to 145.35 per dollar, having been hammered this week to a nine-month low of 146.56 per dollar as yield differentials between U.S. and Japan widened.

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It, however, still neared levels that sparked an intervention by Japanese authorities late last year.


The euro wallowed near its five-week low at $1.0876, down 0.6 per cent for the week, while the risk sensitive Australian dollar broke a key support level overnight and was last at $0.6417.


Elsewhere, oil prices were marginally higher. Brent crude futures rose 0.1 per cent at $84.24 per barrel and U.S. West Texas Intermediate crude futures also increased 0.3 per cent to $80.64.


The gold price was slightly higher at $1,893.6 per ounce.

 

AHN







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