With the London attacks, and the news that the GCC cut ties with Qatar for supporting terrorism has surprised all. So how has this left the stock markets?
In a weekend of uncertainty with terror attacks happening for the third time in 2 months in the UK and the surprise news on Monday that Saudi Arabia, Egypt, the United Arab Emirates and Bahrain have put an end to their relationship with Qatar due to their support for several terrorist groups, a lot is expected from the global stock markets as the world wakes today. The dollar has dropped to an almost 7 month low on the back of US job growth data. As would be expected, sterling fell after the attacks at the weekend which killed at least seven people and wounded 48, just days before Thursday’s national election.
The dollar nursed losses on Monday, coming close to a seven-month low against a currency basket plumbed after disappointing U.S. employment data prompted investors to pare back their expectations of future U.S. Federal Reserve rate hikes. The dollar index, which tracks the greenback against a basket of six major currencies, was flat in early Asian trading at 96.736 but not far from Friday’s nadir of 96.654, its lowest since Nov. 9. The dollar was nearly unchanged against the yen at 110.40 after brushing a two-week low of 110.25 earlier in the session, while the euro edged down 0.1% to $1.1270 after rising to a seven-month high of $1.1285. Sterling edged down 0.2% to $1.2866. The People’s Bank of China set the midpoint rate at 6.7935 per dollar prior to market open, firmer than the previous fix 6.8070.
U.S. benchmark and long-dated Treasury yields fell to nearly seven-month lows, and short-dated yields touched their lowest in more than two weeks on Friday after weaker-than-expected U.S. employment data suggested cautious Federal Reserve policy beyond June. U.S. seven-year Treasury yields hit 1.954%, a roughly 6-1/2-month low. Yields of 1.402% for the three-year and 1.266% for the two-year marked their lowest in more than two weeks. U.S. 10-year Treasuries were last up 16/32 in price, with yields dropping to 2.161% from 2.217 % late on Thursday. The three-year was up 1/32 in price, and its yield fell to 1.427% from 1.446%.
Gold held steady after hitting its highest in over six weeks earlier on Monday, buoyed by disappointing U.S. jobs data that appeared to dilute the prospects for an aggressive string of interest rate hikes in the United States. Spot gold had climbed 0.1% to $1,280.74 per ounce. It hit a peak of $1,281.95 an ounce early in the session, its strongest since April 21. U.S. gold futures for August delivery were up 0.2% at $1,283.3 an ounce. Palladium on Monday matched its June 2 high of $843.10 an ounce, which was the metal’s strongest since September 2014. Among other precious metals, silver hit a high of $17.585 an ounce early in the session, its strongest since April 26. Platinum was down 0.6% at $946.10.
MSCI‘s all-country world stock index hit a record high, rising 0.63%, as it posted a seventh straight week of gains and its longest winning streak since 2010. Financial stocks in Britain lifted the FTSE 100 index of top UK blue chips to all-time peaks while Germany’s DAX index also set new highs. Both later trimmed gains but closed the day higher. On Wall Street, the three major U.S. indexes closed at fresh record highs. The Dow Jones Industrial Average rose 62.11 points, or 0.29%, to close at 21,206.29. The S&P 500 gained 9.01 points, or 0.37%, to 2,439.07 and the Nasdaq Composite added 58.97 points, or 0.94%, to 6,305.80. MSCI’s broadest index of Asia-Pacific shares outside Japan was slightly lower. Japan’s Nikkei reversed earlier losses to climb 0.1% as the yen surrendered some of its gains. Chinese shares fell 0.5%, with news of service-sector activity rising in May at the fastest pace in four months failing to lift sentiment. Australian shares slid 0.8% and South Korea’s KOSPI was little changed. Taiwan shares bucked the trend, hitting their highest level since 2000 for a second straight session.
Stock markets in Qatar and the rest of the six-nation Gulf Cooperation Council look set to drop on Monday. Qatar’s stock index on Sunday edged down 0.2% but Ezdan, which had tumbled as much as 29% since late last month, when shareholders approved the delisting of the company, jumped its 10% daily limit to 12.58 riyals in heavy trade. Dubai’s index fell 0.3% although some of the beaten-down stocks of the last few months continued recovering gradually; amusement park operator DXB Entertainments edged up 0.3%. In Egypt the index, which had risen to a record closing high on Thursday, gained a further 0.2% to 13,495 points, although turnover shrank.