• 6 hours Bankruptcy Is The Only Choice For Many Retailers
  • 9 hours Are Copper Naysayers Missing The Big Picture?
  • 12 hours Jerome Powell's Impossible Challenge
  • 1 day Economists Call For Recession In 2021
  • 1 day Hong Kong Billionaire Loses Big On Canadian Energy Play
  • 2 days Trade Tensions Weigh On South Korea, Japan Relations
  • 2 days Lithium Hype Can't Live Up To Supply Realities
  • 3 days Tesla Scrambles To Salvage Its Stumbling Solar Business
  • 3 days Why Silicon Valley Is Moving To Toronto
  • 3 days Hong Kong Residents Are Fleeing To Taiwan At A Record Pace
  • 4 days Trickle Down Tax Cuts Aren't Helping Bolster GDP Growth
  • 4 days Wealth Gap Widens Between Baby Boomers And Millennials
  • 4 days How Investors Are Playing Uncertain Markets
  • 4 days Demand For Cash Is On The Rise
  • 5 days The Best Way To Ride The Gold Rally
  • 5 days Corn Industry Reeling After Shocking Ethanol Decision
  • 6 days Gold Miners Eye Further Upside
  • 6 days Alibaba Exec Sets Record With $3.5 Billion Brooklyn Nets Purchase
  • 7 days Smart Contracts: The Tech Reshaping Entire Industries
  • 7 days Protests Threaten $5 Billion Peruvian Copper Mine
Market Sentiment At Its Lowest In 10 Months

Market Sentiment At Its Lowest In 10 Months

Stocks sold off last week…

The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

Fred Dunkley

Fred Dunkley

Writer, Safehaven.com

Fred Dunkley is a tech analyst, writer, and seasoned investor. Fred has years of experience covering global markets and geopolitics. 

Contact Author

  1. Home
  2. Markets
  3. Other

Asian Markets Up On High Oil Prices And Weak Dollar

HK

While some speculated that Asian markets might respond poorly to Trump’s announcement that the U.S. would withdraw from the Iran nuclear deal and initiate new sanctions, they ended Thursday higher and opening on a strong note Friday, tracking the U.S. stock market and bursting oil prices.

By the time of the U.S. market close Thursday, the Shanghai Composite was up 0.48 percent, right before its open, while the Hong Kong Hang Seng was trading up 0.89 percent and the Japanese Nikkei was up 39 percent.

Asian markets were still trading higher at the open Friday, closing up after tracking overnight gains on Wall Street.

(Click to enlarge)

Source: CNBC

Shares were higher in most markets except for Singapore.

Shock and awe ruled in Malaysia, where markets remained closed following a surprise loss for the ruling coalition in Wednesday’s elections.

Sentiment now is that it’s not Iran that Asian markets are tracking; rather, it’s oil prices, the U.S. dollar and North Korea.

But more importantly for these markets, a weak inflation reading had investors less concerned that the Fed would increase interest rate hikes this year, leading to the biggest drop in the dollar since March.

Inflation data eased concerns that an improving U.S. economy and accompanying uptick in inflation will force the Federal Reserve to tighten monetary policy.

"The market is breathing a sigh of relief that there was not an upside surprise to the inflation stats," Peter Boockvar, the chief investment officer of Bleakley Financial Group, wrote in an email to clients.' Related: Seoul Leads Luxury Housing Price Index

The WSJ Dollar Index (BUXX) was down another 0.1 percent Friday after having taken some of its biggest losses the day before as April U.S. consumer prices saw a much lower-than-expected increase.

(Click to enlarge)

Source: WSJ

The Thursday release of the U.S. consumer price index (CPI) for April came in with an increase of 0.2 percent month-on-month and 2.5 percent year-on-year—below expectations of 0.3 percent and 2.5 percent, respectively.

Core CPI, including food and energy, was up 0.1 percent in April from March, and 2.1 percent year-on-year.

(Click to enlarge)

Source: CNBC

Overall, global stocks saw a three-week high on Thursday helped along by surging oil prices, which are countering the negative effect of geopolitical uncertainty.

West Texas Intermediate (WTI) added 59 cents to $71.73 a barrel on Thursday, reaching higher levels than its seen in over three years. Brent crude gained 58 cents, reaching $77.79 per barrel.

But for Asian markets, the North Korea specter carries more weight on the geopolitical front, and on Thursday, Trump announced that his meeting with Kim Jong UN was set to take place in Singapore on June 12, signaling a possible easing of tensions as far as markets are concerned.

Speaking to Bloomberg, Prudential Financial chief market strategist Quincy Krosby warned that “this tug-of-war remains in the market, regardless of the positive headlines on North Korea, regardless of the positive headlines on earnings”.

“This is a market that has to sort that out, and that 10-year [US Treasury] yield flirting with three percent again is a reflection of that tug-of-war,” he noted.

By Fred Dunkley for Safehaven.com

More Top Reads From Safehaven.com:

Back to homepage

Leave a comment

Leave a comment