On Friday market investors moved away from trading riskier assets amid renewed concerns about COVID-19 and caution ahead of key U.S. inflation data, thus leading Asian shares and European futures to fall.
Earlier in the week, shares and risk-friendly currencies had performed well, with MSCI’s regional benchmark posting its best day in two months on Tuesday. This was helped by indications that the new coronavirus variant, Omicron strain might not be as economically disruptive as first feared.
Market summary –
• On Friday, the MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.6%, cutting off three days of gains.
• Japan’s Nikkei index fell 0.5%.
• The pan-region Euro Stoxx 50 futures in early European trading, fell 0.53% and FTSE futures also lost 0.46%
• However, the index continues to stay up 1.7% this week, despite Friday’s falls.
• After Fitch downgraded it to restricted default status, shares in China Evergrande Group lost 1.5%.
• However, an index tracking mainland Chinese developers listed in Hong Kong fell just 0.36% and contagion was limited. It outperformed the local benchmark off 0.66%.
• With the Chinese central bank on Thursday directing financial institutions to hold more foreign exchange in reserve for a second time this year, caused the yuan to lose about half a percent in offshore trade on Thursday.
• On Friday, the yuan was volatile and last sat at 6.3697.
• Other currency moves were however muted.
• The dollar index ahead of the CPI data held firm, and was heading towards its seventh consecutive weekly rise.
• The euro after rising on Wednesday in line with an overall risk friendly mood also took a breather having risen 0.7%, before falling 0.4% on Thursday.
• The U.S. Treasury yields slipped a little overnight before steadying risk-off tilt.
• On Friday, the benchmark 10-year Treasury notes last traded at 1.4888%.
• The two-year yield remained higher at 0.7086%.
• On Friday, oil also lost ground, however, equities was heading for a weekly gain.
• The U.S. crude fell 0.14% to $70.84 a barrel.
• The brent crude fell 0.2% to $74.27.
• The spot gold price on Friday rose 0.16% to $1,777.3 an ounce.