SHANGHAI, Oct 22 — Asian shares fell today and US Treasury yields ticked lower as investors fretted over the slow pace of US stimulus talks and a surge in global cases of Covid-19.
Global investor sentiment took a fresh hit over talks to boost the world’s largest economy after US President Donald Trump yesterday accused Democrats of being unwilling to craft an acceptable compromise on stimulus, following reports of progress earlier in the day.
It remains unclear whether stimulus negotiations would continue ahead of the US presidential and congressional elections on November 3.
“We still think that this deal will remain elusive in the sense that this amount that we are talking about, US$1.88 trillion (RM7.8 trillion), that’s about 9 per cent of GDP, and 2.2 trillion which is Speaker Pelosi’s package, is even higher at around 10 per cent of GDP,” said Anthony Chan, chief Asia investment strategist at Union Bancaire Privee (UBP) in Hong Kong.
“Even if both sides do manage to reach an agreement, given the tight deadline ahead of the election it’s unlikely that something like that would be able to go through the Senate smoothly.”
In morning trade, MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.63 per cent.
Australian shares gave up 0.6 per cent, Seoul’s Kospi was off 0.59 per cent and and Chinese blue-chips dropped 1.1 per cent.
The Nikkei was 0.69 per cent lower.
Uncertainty over the passage of a bill to stimulate a pandemic-ravaged economy comes as the United States faces a new wave of Covid-19 cases.
Nearly two-thirds of US states were in a danger zone of coronavirus spread and six, including election battleground Wisconsin, reported a record one-day increase in Covid-19 deaths yesterday.
Against the backdrop of stimulus talks and the spread of the novel coronavirus, Wall Street’s three major averages closed lower yesterday after a choppy trading session.
The Dow Jones Industrial Average inched lower by 0.35 per cent, while the S&P 500 lost 0.22 per cent. The tech-heavy Nasdaq Composite dropped 0.28 per cent.
Today, the dollar was 0.11 per cent higher against the yen at 104.67, while the euro notched down 0.19 per cent to US$1.1839.
But against a basket of major peers, the dollar appeared relatively unaffected by setbacks to stimulus talks, trading only slightly higher at 92.784.
“Markets are now pricing in a strong likelihood of a Biden Presidency perhaps even clean sweep of Congress, and this is weighing on the USD, as they view a less confrontational trade environment. They will also probably be factoring in a large fiscal stimulus early next year, with none of the hold up that is currently preventing a deal,” Rob Carnell, chief economist at ING in Singapore said in a note.
The yield on benchmark US 10-year Treasury notes ticked down to 0.8108 per cent from a US close of 0.816 per cent yesterday.
In commodity markets, oil prices dropped, adding to sharp losses overnight, after higher US gasoline inventories pointed to a deteriorating outlook for fuel demand as coronavirus cases soar.
US West Texas Intermediate (WTI) crude futures fell 0.6 per cent to US$39.79 a barrel and Brent crude futures were 0.48 per cent lower at US$41.358 a barrel. — Reuters
Source: Malay Mail
No comments:
Post a Comment