SYDNEY, Sept 27 — Asian shares got off to a cautious start today as a jump in oil prices to three-year highs could inflame inflation fears and aggravate the recent hawkish turn by some major central banks.
Oil pushed past its July peaks as global output disruptions forced energy companies to pull large amounts of crude out of inventories, while a shortage of natural gas in Europe pushed costs up across the continent.
Brent added another 62 cents today to US$78.71 (RM329.28) a barrel, while US crude rose 71 cents to US$74.69.
“We forecast that this rally will continue, with our year-end Brent forecast of US$90/bbl vs. US$80/bbl previously,” wrote analysts at Goldman Sachs in a client note.
“The current global oil supply-demand deficit is larger than we expected, with the recovery in global demand from the Delta impact even faster than our above consensus forecast.”
Such an increase could stoke speculation that global inflation will prove longer-lasting than first hoped and hasten the end of super-cheap money, favouring reflation trades in bank and energy stocks while bruising bond prices.
MSCI’s broadest index of Asia-Pacific shares outside Japan was flat, after three consecutive weeks of loss.
Japan’s Nikkei gained 0.4 per cent on hopes for further fiscal stimulus once a new prime minister is chosen.
Nasdaq futures edged up 0.1 per cent, and S&P 500 futures 0.3 per cent.
The fate of China Evergrande Group remained a major unknown after the property giant missed a payment on offshore bonds last week, with further payment due this week.
Stocks in Hong Kong have felt the most pressure, though the government in Beijing did add more liquidity to the financial system.
“We expect policymakers in China to allow deleveraging of property sector debt to take hold with an eye to reducing moral hazard, but are confident that they will actively manage the restructuring and effectively limit financial spillovers,” said analysts at JPMorgan in a note.
Eyes will also be on US fiscal policy with the House of Representatives due to vote on a US$1 trillion infrastructure bill this week, while a September 30 deadline on funding federal agencies could force the second partial government shutdown in three years.
The week is packed with US Federal Reserve speeches led by Chair Jerome Powell tomorrow and Wednesday, with more than a dozen other events on the calendar.
The latest hawkish shift by the US central bank, and several others globally, saw bond yields seesaw before ending last week sharply higher.
The 10-year Treasury is at its highest since early July at 1.46 per cent amid talk the reflation trade could be back on as the world braces for the end of super-cheap money.
The lift in yields underpinned the US dollar, particularly against emerging market currencies which compete with Treasuries for global funds.
Against a basket of currencies, the dollar was firm at 93.292 and just off August’s 10-month top of 93.734.
It even made some ground on the yen to reach a major chart barrier at 110.79. A break of that would take the currency to territory not visited since early July.
The euro was steady at US$1.1719 as investors pondered the implications of a German government led by the centre-left Social Democrats after a narrow victory in yesterday’s election.
The Social Democrats claimed a “clear mandate” to lead a government for the first time since 2005, ending 16 years of conservative-led rule under Angela Merkel.
“The likelihood of a political shift to the left suggests Germany’s fiscal stance could become less of a drag on the economy over the next few years than is currently projected,” said analysts at CBA in a note. “This would ultimately benefit the euro.”
The firmer dollar has weighed on gold, which was pinned at US$1,748 an ounce and just above a six-week low at US$1,738. — Reuters
Source: Malay Mail
A word from our sponsor:
Need Help With Your Personal Finance / Money Issue or need a coach to help you structure or just want to learn the financial skill to self manage your financial matters and retirement. iLearnFromCloud.com
Need to solve a problem quickly, now you can solve it by learning the art of problem solving Art Of Problem Solving
Feeling hungry. Latest food news from Best Restaurant To Eat Malaysian Food and Travel Blog
Memory loss. Need to organize better. Solve problem fast with Free Mind Mapping Software Mind Mapping 101
Need A Customized System Development for your business or Going Paperless XPERT TECHNOLOGIES - Empowering The Paperless Economy
No comments:
Post a Comment