Asian shares shaky as US readies China tariffs, euro at two-week low on ECB

An electronic board showing the Nikkei share average is seen as market prices are reflected in a glass window at the Tokyo Stock Exchange (TSE) in Tokyo. — Reuters pic
An electronic board showing the Nikkei share average is seen as market prices are reflected in a glass window at the Tokyo Stock Exchange (TSE) in Tokyo. — Reuters pic

TOKYO, June 15 ― Asian shares wobbled today as investors braced for US tariffs against , while the euro flirted with two-week lows after a cautious European indicated it would not raise interest rates for some time.

US President Donald Trump has made up his mind to impose “pretty significant” tariffs and will unveil a list targeting US$50 billion (RM199 billion) of goods today, an administration official said. Beijing has warned that it was ready to respond.

While it is not clear when Trump will activate the measures, rising Sino-US trade tensions will put additional pressure on China’s economy, which is starting to show signs of cooling under the weight of a multi-year crackdown on riskier lending.

The Asia Pacific MSCI index edged down 0.2 per cent, with most regional markets shrugging off a strong close on . But Japan’s Nikkei average added 0.5 per cent.

The euro was headed for its worst weekly loss in 19 months after the ECB signalled on Thursday it will keep interest rates at into at least mid-2019, even as it pledged to end its massive purchase scheme by the end of this year.

The common currency shed 1.9 per cent after the rate comments in its sharpest daily fall in almost two years.

In early Asian trade today, it eased 0.1 per cent lower to US$1.15595, its lowest level since May 30.

The dollar index against a basket of six major peers gained about 0.2 per cent to a two-week high of 94.973, after rallying more than 1 per cent the previous day.

The 10-year German bund yield also fell to 0.424 per cent from around 0.50 per cent before the ECB.

“The ECB has made it clear that it does not want quick rate hikes, although it now considers progress towards the target as ‘substantial’. Against the background of uncertainties in the world today ― such as trade ― this makes sense, as does the emphasis on data dependency,” Stefan Kreuzkamp, Chief Investment Officer at DWS.

On Wall Street, two of the three main indexes closed higher, with technology stocks leading the charge on the benchmark S&P 500.

Helping boost US was a Commerce Department report showing retail sales rose more than expected in May, the latest indication of an acceleration in economic growth in the second quarter.

While the Fed and the ECB provided much of the week’s central bank fireworks, the Bank of Japan is expected to produce no surprises at the end of a two-day policy meeting today. Virtually no one is forecasting changes to its huge stimulus programme given stubbornly weak inflation and recent signs of slowing growth.

Oil markets edged up, despite the strengthening dollar and fears that Opec countries could decide to increase output at a meeting next week.

West Texas Intermediate (WTI) crude oil futures were up 0.2 per cent at US$67.02 per barrel, while was at US$76.02.

Many markets in Southeast Asia were closed today for holidays celebrating the end of Ramadan. ― Reuters

Source: The Malay Mail Online

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