The slide in U.S. tech shares and the caution ahead of this week’s U.S. Federal Reserve policy meeting, meant Asian stocks fell, yet Sterling steadied following the UK’s election

Currencies

Sterling steadied on Monday as British Prime Minister Theresa May scrambled to pick up the pieces and reunite her Conservative Party after a disastrous election that could disrupt Brexit negotiations. Sterling last traded at $1.2756, edging up 0.1% on the day, after sliding 1.7% on Friday, its biggest one-day drop in around eight months. The euro edged up 0.1% to $1.1208 staying below a seven-month high of $1.1285 set in early June. The dollar held steady at 110.29 yen having retreated from Friday’s one-week high of 110.815 yen. The Aussie however took a backseat against its U.S. counterpart at $0.7534, from $0.7549 in early trade. It was still up 1.2% this week, not far from a six-week peak of $0.7568 set on Wednesday following better-than-expected economic growth at home. China’s Yuan weakened slightly against the U.S dollar on Friday after the central bank fixed its official guidance lower for a second straight day since it made changes to the midpoint mechanism last Friday.

 

Treasuries/Rates

Prices on U.S. Treasury futures slipped on Sunday as after-hour trading began in advance of the U.S. Treasury Department’s auctions of $24 billion in three-year notes and $20 billion in benchmark 10-year debt on Monday. In late trading, U.S. 10-year Treasuries were last down 3/32, yielding 2.204%, compared with 2.194% on Thursday. Ten-year yields earlier hit a one-week high of 2.228%. U.S. 30-year bonds slipped 2/32 to yield 2.857%, up from Thursday’s 2.855%. Earlier in the session, 30-year yields rose to one-week peaks of 2.883%. On the front end, U.S. two-year yields were at 1.338%, rising from 1.322% late Thursday after reaching a four-week high of 1.351%.

Commodities/Energy

Gold prices edged up early on Monday as Asian stocks fell ahead of a two-day U.S. Federal Reserve policy meeting that could give clues on the pace of possible U.S interest rate hikes over the rest of the year. Spot gold had risen 0.3% to $1,269.16 per ounce. It dropped 1% on Friday in its biggest one-day percentage decline since May 18. U.S. gold futures for August delivery were flat at $1,271.60. Palladium, which hit its highest level in 16 years on Friday, was up 0.3% at $893.50 an ounce. Oil prices rose on Monday as futures traders bet the market may have bottomed after a recent steep fall, even as physical markets remain bloated by oversupply, especially from a relentless rise in U.S. drilling. Brent crude futures were trading at $48.41 per barrel, up 26 cents, or 0.5%, from their last close. U.S. West Texas Intermediate crude futures were at $46.07 per barrel, up 24 cents, or 0.5%.

 

Global Equities

Technology stocks sold off sharply on Friday, taking a toll on the Nasdaq and dragging on other major Wall Street indexes, which touched record highs earlier in the day. The Nasdaq Composite dropped 113.85 points, or 1.8%, to end at 6,207.92. The Dow Jones Industrial Average rose 89.44 points, or 0.42%, to 21,271.97, while the S&P 500 lost 2.02 points, or 0.08%, to 2,431.77. MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.8%, with the tech index sliding 1.5%. Japan’s Nikkei was down 0.6% and South Korea’s slid 1.2%. Hong Kong’s Hang Seng lost 1.3% while Shanghai fell 0.5%.

Regional Updates

Shares in Qatari banks fell on Sunday after the United Arab Emirates central bank ordered UAE banks to be wary of accounts which they hold with six Doha-based lenders, while Dana Gas and Drake & Scull outperformed in the UAE. Riyadh index lost 0.8% in low volumes, weighed down by the petrochemical sector. In Egypt, the index fell 0.5%, easing from an all-time high as some investors booked profits. The largest listed lender, Commercial International Bank, lost 1.1%. In Abu Dhabi, Dana Gas soared 13.2% and was the most heavily traded stock. The Dubai stock index fell 0.4% as 12 shares rose but 18 declined including builder Arabtec, down 1.6%.


This document is issued by RAK BANK, while all reasonable care has been taken in preparing this document; no responsibility or liability is accepted for errors of fact or for any opinion expressed herein. Opinions, projections and estimates are subject to change without notice. This document is for information purposes only and for private circulation. It does not constitute any offer, recommendation or solicitation to any person to enter into transaction or adopt any hedging, trading or investment strategy, nor does it constitute any prediction of likely future movements in rates or prices or any representation that any such future movements will not exceed those shown in any illustration. Any investments discussed may not be suitable for all investors in any of the instruments or currencies mentioned in this document. You are advised make your own independent judgment with respect to any matter contained herein. In the UAE, RAK BANK conducts designated investment business only with Market Counterparties % Intermediate Customers and this document is directed only at such persons. Other persons should not rely on this document. Please call Santosh / Mahant / Imran / Rabia / Sunil +971-4-2913001 for FX/Deposit Rates.
Share