With sanctions being slapped on Russia by the US and China expanding access to capital markets for all types of investors, what is the affect on your investments?

Currencies

 

The dollar bobbed above a 13-month low against a basket of major currencies on Wednesday, as investors awaited the U.S. Federal Reserve’s policy statement. The dollar index, which measures the greenback’s value against a basket of six major currencies, stood at 94.082. On Tuesday, it had fallen to as low as 93.638, the lowest for the dollar index since June 2016. Against the yen, the dollar was steady at 111.89 yen, holding gains after rising 0.7% on Tuesday. Sterling hit as high as $1.3084 after the data, before easing back to trade slightly up on the day at $1.3033. That was less than a cent away from last week’s high of $1.3126, the strongest since September. The Canadian dollar, which has gained some 10% since early May, failed to crack C$1.2480 against the U.S. dollar, or 80.13 U.S. cents, after breaching C$1.25 on Monday, even as oil prices rallied 3%.

Treasuries/Rates

 

 

Long-dated U.S. Treasury yields jumped by the most in almost five months on Tuesday as stocks hit record highs and demand for safe-haven bonds fell. Yields on 30- and 10-, and seven-year Treasury securities, which move in the opposite direction to their prices, rose by about eight basis points each, the largest rise for all three since March 1. Yields on shorter-dated paper rose by a lesser margin, prompting a steepening of the yield curve. The yield on the benchmark 10-year note was at 2.322% on Wednesday, compared with its Tuesday close of 2.326%, and well above Friday’s three-week low of 2.225%.

Commodities/Energy

 

 

Gold prices held steady early on Wednesday as investors waited for a statement from the Federal Reserve later in the day for clues on the outlook for U.S. monetary policy. Spot gold had dropped 0.1% to $1,247.08 per ounce. U.S. gold futures for August delivery fell 0.4% to $1,246.70 per ounce. Oil prices firmed on Wednesday to hold near eight-week highs hit in the previous session, on expectations of a drawdown in U.S. stocks and as a rise in shale oil production shows signs of slowing. Brent crude futures had risen 36 cents, or 0.7%, to $50.56 a barrel, after rallying more than 3% on Tuesday. U.S. West Texas Intermediate futures climbed 46 cents, or 1%, to $48.35 a barrel.

Global Equities

 

 

A set of strong U.S. earnings reports lifted the S&P 500 stock index to a record closing high on Tuesday. The Nasdaq hit a record high close, even though shares of Google parent Alphabet Inc slid 2.9% after the company late on Monday flagged rising costs. The Dow Jones Industrial Average was up 100.26 points, or 0.47%, to 21,613.43, the S&P 500 gained 7.17 points, or 0.29%, to 2,477.08 and the Nasdaq Composite added 1.37 points, or 0.02%, to 6,412.17. MSCI’s index of stock markets across the world was up 0.2%, while European shares rose 0.5%. MSCI’s broadest index of Asia-Pacific shares outside Japan was little changed, but drew mild support after the S&P 500 climbed to an all-time high overnight on well-received results from McDonald’s and Caterpillar in addition to bank share gains. Australian stocks gained 1% with a smaller-than-expected rise in local inflation supporting views that interest rates will remain at record lows for some time to come. The Australian dollar slipped 0.3% to $0.7918 Japan’s Nikkei added 0.5% after the dollar rallied against the yen overnight to pull away from seven-week lows. Shanghai lost 0.2% while South Korea’s KOSPI slipped 0.3%.

Regional Updates

 

 

Poor corporate earnings, due in part to Saudi Arabia’s austerity policies and sluggish economic growth, weighed on the Saudi stock market on Tuesday as most regional bourses were virtually flat. The Saudi stock index fell 0.3% in thin trade. In Dubai, the index edged down 0.1% as blue chip Emaar Properties slipped 0.4%. In the neighboring emirate Abu Dhabi index edged up 0.04% to 4,542 points. Qatar’s index edged up 0.2% as Qatar Gas Transport (Nakilat), the most active stock, fell 1.8% after saying first-half profit dropped to 408.3 million riyals ($112 million) from 500.3 million riyals, although revenue declined less sharply.


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