Monday, January 6, 2020

Asian stocks extends losses on Monday morning as rising political tensions continue to dominate headlines

Tags
  • Dollar
  • Gold
  • Yen
  • Stocks
  • Oil

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Market Recap: Asian stocks extends losses on Monday morning as rising political tensions continue to dominate headlines

Global markets slump thanks to rising geopolitical risk. Reports on Friday said that a US airstrike killed Iranian Major-General Qassem Soleimani, head of the Islamic Revolutionary Guard Corps-Quds force. Wall Street ended Friday lower as a result, as the market expects political tensions between the US and the Middle East to escalate.

Indexes Change (%) Net Change Closing Price
Dow Jones -0.81% -233.92 28,634.88
S&P500 -0.71% -23.00 3,234.85
Nasdaq -0.79% -71.42 9,020.77
*Source: Bloomberg

Friday’s slump in the global market led to weekly losses for most major indices except the Nasdaq, Hang Seng and Straits Times Index.

Indexes Weekly Change (%) Net Change Closing Price
Dow Jones -0.04% -10.38 28,634.88
S&P500 -0.16% -5.17 3,234.85
Nasdaq 0.16% 14.15 9,020.77
FTSE100 -0.29% -22.50 7,622.40
Euro Stoxx -0.24% -8.90 3,773.37
Nikkei -0.76% -181.10 23,656.62
KOSPI -1.26% -27.75 2,176.46
ASX200 -1.29% -88.15 6,733.50
Hang Seng 0.80% 226.08 28,451.50
Straits Times 0.38% 12.29 3,238.82
*Source: Bloomberg

The dollar slipped on Friday after ISM Manufacturing PMI for December fell to 47.2, widely missing economists’ forecasts.   But the greenback later recovered before the US markets closed as investors started to shift away from riskier assets.

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Demand for safe haven assets surged thanks to the airstrike. Gold surged 1.51%, to 1552.20, almost reaching the six-year high of 1552.55. US treasuries spiked as well, with benchmark 10-year yields slipping 9bps to 1.79%.

Safe Haven Assets Change (%) Net Change Closing Price
Gold 1.51% 23.07 1,552.20
Silver 0.21% 0.04 18.00
JPY 0.44% 0.48 108.09
*Source: Bloomberg
US Treasury yields Change (bps) Yield (%)
2-Year -4 1.52%
10-Year -9 1.79%
30-Year -9 2.24%
*Source: Bloomberg

Oil surged the most since the attack on the Saudi oil production facilities in September last year. Both Brent and WTI crude oil futures spiked on Friday as rising tension between the US and Iran increases the risk of instability in the Middle Eastern region, which could potentially impact oil production and oil prices.

Oil Futures Change (%) Net Change Closing Price
Brent Crude 3.55% 2.35 68.60
WTI Crude 3.06% 1.87 63.05
*Source: Bloomberg

Asian stocks look set to track US losses on Monday morning, with Nikkei, KOSPI and ASX200 opening 1.42%%, 0.99% and 0.01% lower. US equity futures were also lower on Monday, with futures tracking the DJIA and S&P500 both 0.37% lower on Monday morning.

Asia Change (%) Net Change Last Price As of (GMT +8)
Nikkei Index -1.72% -406.41 23,245.84 8:10:15 AM
KOSPI Index -0.73% -15.96 2,160.50 8:30:10 AM
ASX200 Index -0.65% -43.70 6,689.80 8:30:05 AM
Hang Seng Futures -0.10% -28.00 28,415.00 2:59:57 AM
*Source: Bloomberg
US Futures Change (%) Net Change Last Price As of (GMT +8)
Dow Futures -0.37% -105.00 28,500.00 8:05:09 AM
S&P500 Futures -0.37% -12.00 3,224.00 8:05:04 AM
Nasdaq Futures -0.36% -32.00 8,781.25 8:05:03 AM
*Source: Bloomberg

Important macro events for the week ahead are (all timings are in GMT +8):

  • Eurozone Dec Inflation Rate (CPI) (Tue, 6pm)
  • US Dec Non-Manufacturing PMI (Tue, 11pm)
  • US Dec ADP Employment Change (Wed, 9.15pm)
  • US Dec Nonfarm Payrolls report (Fri, 9.30pm)