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Asia stocks slip as gold slides, oil takes a spill

Reuters2021-08-09

* Asian stock markets :

* Gold drops more than 4% at one stage, oil prices slide

* Strong U.S. jobs report brings Fed tapering nearer

* Rising Treasury yields lift dollar to 4mth top on euro

By Wayne Cole

SYDNEY, Aug 9 (Reuters) - Asian shares wobbled on Monday amid sharp losses in gold and oil prices, while the dollar reached four-month highs on the euro after an upbeat U.S. jobs report lifted bond yields.

Sentiment was shaken by a sudden dive in gold as a break of $1,750 triggered stop loss sales to take it as low as $1,684 an ounce. It was last down 1.4% at $1,738.

Brent also sank 2% on concerns the spread of the Delta variant would temper travel demand.

Holidays in Tokyo and Singapore made for thin trading conditions, leaving MSCI's broadest index of Asia-Pacific shares outside Japan down 0.5%.

Japan's Nikkei was shut but futures were trading 100 points below Friday's close. Nasdaq futures slipped 0.4% and S&P 500 futures 0.3%.

Chinese trade data out over the weekend undershot forecasts, while figures out Monday showed inflation slowed to 1% in July offering no barrier to more policy stimulus.

China's blue chips index were a fraction firmer.

The U.S. Senate came closer to passing a $1 trillion infrastructure package, though it still has to go through the House.

Investors were still assessing whether Friday's strong U.S. payrolls report would take the Federal Reserve a step nearer to winding back its stimulus.

"There is not a lot of disagreement on a taper announcement coming sometime between September-December followed by actual tapering sometime between November and January," said Rodrigo Catril, a senior FX strategist at NAB.

However, the pace of tapering was still up in the air and would decide when an actual rate hike came, he said. The Fed is currently buying $120 billion of assets a month, so a $20 billion taper would end the programme in six months whilst a $10 billion tapering approach would take a year.

The spread of the Delta variant could argue for a longer taper with U.S. cases back to levels seen in last winter's surge with more than 66,000 people hospitalised.

Figures for July CPI due this week are also expected to confirm inflation has peaked, with prices for second hand vehicles finally easing back after huge gains.

There are four Fed officials speaking this week and will no doubt offer their own take on tapering.

In the meantime, stocks have been mostly underpinned by a robust U.S. earnings season. BofA analysts noted S&P 500 companies were tracking a 15% beat on second quarter earnings with 90% having reported.

"However, companies with earnings beats have seen muted reactions on their stock price the day following earnings releases, and misses have been penalized," they wrote in a note.

"Guidance is stronger than average but consensus estimates for two-year growth suggest a slowdown amid macro concerns."

Financials firmed on Friday as a steeper yield curve is seen benefiting bank earnings, while also penalising the tech sector where valuations are sky high.

Yields on U.S. 10-year notes were up at 1.30% in the wake of the jobs report, having hit their lowest since February last week at 1.177%.

That jump gave the dollar a broad lift and knocked the euro back to $1.1754 , and briefly to its lowest since April at $1.1740. The dollar likewise climbed to 110.22 yen and away from last week's trough of 108.71.

That took the U.S. currency index up to 92.882 and nearer to the July peak of 93.194.

Oil prices eased further after suffering their largest weekly drop in four months amid worries coronavirus travel restrictions would threaten bullish expectations for demand.

Brent fell $1.44 to $69.26 a barrel, while U.S. crude lost $1.38 to $66.90.

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Comment11

  • SuperHuat
    ·2021-08-09
    awesome
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  • Waiyanno
    ·2021-08-09
    Woo
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  • Rickyt089
    ·2021-08-09
    Like pls
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  • Kc48
    ·2021-08-09
    Wow 
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  • Jeremysee
    ·2021-08-09
    No. Pls like
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    • Kah
      Ok
      2021-08-09
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  • henghm
    ·2021-08-09
    Like and comment
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  • OO_898
    ·2021-08-09
    Nice 
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    • BeRich
      ok
      2021-08-09
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    • CLeow
      ok
      2021-08-09
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  • Pluto891
    ·2021-08-09
    gold in picture. Dropping... soon we will hear it a good hedge 
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    • 慢的老人
      Gold will never be out of fashion
      2021-08-09
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  • Melonade
    ·2021-08-09
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  • Melonade
    ·2021-08-09
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  • Nocturne78
    ·2021-08-09
    Like
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