euro Climbs Along With Oil as Japan Stocks Decline: Markets Wrap

31-Dec-2016 Intellasia | Bloomberg | 6:00 AM Print This Post

The euro spiked higher as the dollar weakened for a second day and oil rebounded in thin end-of-year trading. Asian stocks fell, with Japan heading toward its first annual loss since 2011.

European currencies including the Danish krone and Swiss franc also appreciated against the greenback and the Bloomberg Dollar Spot Index shifted lower after reaching the highest level in more than a decade earlier this week. Oil was poised for its first annual advance in three years. The Nikkei 225 Stock Average erased its gain for the year while Chinese shares advanced on the final day of trading. The S&P 500 Index ended little changed Thursday following the announcement of new American sanctions against Russia over election hacks.

Trading has been thin across the globe during the last week of the year, with volumes in crude oil, equities and currencies all below average. Investors may be reallocating money as they assess asset moves in the wake of the US election that took the dollar to multi-year highs, sent Treasuries tumbling and spurred a rally in American equities.

“Markets are extremely thin and perhaps position tuning occurred,” according to Shigeki Yoshitoshi, head of Japan foreign-exchange and commodities sales at Australia & New Zealand Bank Group Ltd in Tokyo. There was no “particular news” driving the euro higher.


The euro rallied as much as 1.6 percent before paring its advance to 0.5 percent and trading at $1.0547 as of 10:55 a.m. in Tokyo. The Danish, Norwegian and Swiss currencies all climbed at least 0.4 percent.

The yen added 0.2 percent to 116.27 per dollar. The currency was up more than 20 percent for the year in August, but has pared that gain to 3.4 percent.

The Bloomberg Dollar Spot Index slipped 0.4 percent after dropping 0.5 percent Thursday, although it remains up 2.6 percent for the year.


Japan’s Topix fell 0.5 percent and is set for a 2.4 percent decline in 2016. The Nikkei 225 index was down 0.6 percent Friday, erasing its gain for the year.

Australia’s S&P/ASX 200 Index dropped 0.3 percent, paring its annual gain to 7.3 percent, while New Zealand’s S&P/NZX 50 was off by 0.2 percent. South Korea is closed for a holiday, with the Kospi Index finishing Thursday with a 3.3 percent advance for 2016.

Hong Kong’s Hang Seng Index rose 0.8 percent, wiping out its losses for the year. The Shanghai Composite Index added 0.3 percent, paring its yearly decline to 12 percent. The Hang Seng China Enterprises Index jumped 0.9 percent, trimming its annual loss to 2.7 percent.

The S&P 500 fell less than one point to 2,249.26 Thursday, the lowest close since December 8. It is up 10 percent for the year. The Dow Jones Industrial Average slipped to 19,819.78, maintaining a 14 percent advance this year.

The Stoxx Europe 600 Index lost 0.4 percent after closing Wednesday at the highest level in a year. The gauge is down 1.5 percent for 2016.


Crude futures rebounded 0.4 percent to $53.97 a barrel, clawing back some of Thursday’s 0.5 percent decline. Prices are up about 46 percent this year. Supply cuts from OPEC and other producing nations next month are intended to stabilise the market and reduce swelling global inventories.

Gold rose for a fifth session Friday, adding 0.3 percent to $1,161.76 an ounce. The metal has rebounded 3 percent from an 11-month low, and is up almost 10 percent for the year.


The yield on 10-year Treasury notes was little changed at 2.47 percent after dropping three basis points Thursday. It slid to 2.46 percent earlier in the week, the lowest since December 14.

The equivalent Australian yield was down two basis points at 2.76 percent, while the yield on similar New Zealand notes dropped five basis points to 3.33 percent.


Category: Japan

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