Trump dents the dollar and resources lead share prices south in Asia and Europe

London — Share prices fell in Europe and Asia on Monday and the dollar dipped against the yen after travel curbs introduced by Donald Trump stoked doubt about the new US president’s economic policies.

A big mover among emerging-markets currencies was the rand, which fell 0.8% to R13.59 to the dollar after reports that President Jacob Zuma was considering a cabinet reshuffle. Earlier, the rand traded down 1.34%.

Wall Street looked set for a weaker opening,
with e-mini futures contracts on the S&P 500 stocks index down 0.2%. Signs of rising German inflation pushed yields on eurozone government bonds higher. French 10-year yields hit a 16-month high in early trade after an opinion poll showed loss of ground by conservative presidential election candidate Francois Fillon.
Trump suspended travel to the US by people from Syria, Iraq, Iran and four other countries on national security grounds. The executive order, signed on Friday, triggered protests in US cities and raised concern among some in markets over the effects of other policy moves.
"Concern on protectionism appears to be rising after President Trump’s executive order to restrict immigration," said Adam Cole, head of G10 foreign exchange strategy with RBC in London.
The pan-European STOXX 600 index dropped 0.8 percent, led by a 1.6% fall in resources-related stocks as commodity prices fell.

 

 

Trade in Asian share markets was thinned by the week-long lunar new year holiday. MSCI’s broadest index of Asia-Pacific shares outside Japan lost 0.5%. Australian shares closed down 0.9%. Japan’s Nikkei fell 0.5% as demand for the safe-haven yen weighed on exporters.
"Trump always stated these were policies he would implement," said James Woods, global investment analyst at Rivkin Securities, Sydney. "This renews concern about a trade war with China that would significantly affect both the Asian and the global economy."
The dollar gained marginally against a basket of currencies. The index was at 100.58, having fallen as low as 100.17 in Asian trade.

The euro was flat at about $1.0690 and the yen was up 0.3% at ¥114.77 a dollar.
In debt markets, German 10-year yields turned higher and were up 2.6 basis points at 0.49% after regional data lifted expectations of German inflation rising.
Consumer prices rose 2.3% year-in-year in Saxony this month. National data due at 1pm GMT is expected to show German inflation rose to hit the ECB’s 2% target.
The premium investors demand to hold French 10-year bonds rather than German hit its widest in three years after a poll on Sunday showed Fillon, embroiled in a scandal over allegations of misuse of public funds, losing ground to centrist candidate Emmanuel Macron.

Both candidates are expected to beat far-right candidate Marine le Pen in any run-off.
Oil prices fell 0.7%, weighed down by the reduced risk appetite stemming from immigration curbs and signs of rising US oil output. Baker Hughes figures showed US drillers added 15 oil rigs last week, taking the total to its highest since November 2015.
Brent crude, the international benchmark, fell 41c to $55.11 a barrel.
Copper fell 0.1% to $5,893 a tonne with trade thinned by China’s holiday.

Reuters | BDlove