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19 Dec 2016 07:06 GMT+0 - Opening Wrap

In Asian Equity Markets stocks steadied near four-week lows on Monday after China agreed to return the U.S. drone it had seized, easing worries for now about possible deterioration in diplomatic relations. MSCI's broadest index of Asia-Pacific stocks outside Japan hit a four-week low and last stood down 0.1 percent. Hong Kong stocks hit a four-month low as the Hong Kong dollar rose in line with the U.S. dollar to which it is pegged, and after insurance shares were hit by a Chinese regulator's warnings.The Nikkei index shed 0.1 percent to 19,391.60 after rising 6.2 percent in the past nine days. The Topix fell 0.1 percent to 1,549.06 and the JPX-Nikkei Index 400 was down 0.04 percent to 13,877.52.


In Currency Markets the dollar edged lower in Asian trading on Monday as some investors took profits after its rise last week to a 14-year peak against a currency basket, though it remained underpinned by expectations of more U.S. interest hikes in the coming year. The dollar was down 0.4 percent against its Japanese peer at 117.38 yen, taking a breather after climbing to a 10-1/2 month high of 118.66 yen last week. The euro was last up slightly at $1.0457 , holding above a nearly 14-year low of $1.0364 notched last week. The Australian dollar fell 0.2 percent on Monday to $0.7293, edging back toward a six-month nadir plumbed last week, after the government forecast a smaller-than-feared budget deficit this year.


In Commodities Markets oil prices rose on Monday in anticipation of tighter crude supply going into 2017 following the decision by OPEC and other producers to cut output to prop up prices. Brent crude futures, the international benchmark for oil prices, were trading at $55.57 per barrel, up 0.7 percent, from their last close. U.S. West Texas Intermediate crude oil futures were up 0.8 percent, at $52.33 a barrel. Gold gained mildly in Asia on Monday in safe haven buying as tension between China and the U.S. over the South China Sea simmers.  Spot gold edged 0.3 percent higher to $1,137.10 an ounce. The bullion touched $1,122.35 on Thursday, its weakest since Feb. 2.


In US Equity Markets  stocks fell on Friday, weighed by a more than 4 percent fall in Oracle shares, while recently battered stocks in the real estate and utilities sectors posted the largest gains. The Dow Jones industrial average fell 0.04 percent, to 19,843.41, the S&P 500 lost 0.18 percent, to 2,258.07 and the Nasdaq Composite fell 0.36 percent, to 5,437.16. Utilities and real estate were the best-performing sectors on the S&P, in a rotation out of recent winning sectors. Oracle lost 4.3 percent after its adjusted revenue missed analysts' estimates. Data showed U.S. new housing projects fell 18.7 percent to a seasonally adjusted annual rate of 1.09 million units. October's starts were revised up to a 1.34 million-unit rate, the highest since July 2007.


In Bond Markets  U.S. long-dated Treasury debt yields edged higher on Friday, continuing a trend that has been in place for several weeks, with investors consolidating some positions ahead of what is expected to be a quiet holiday period for economic data.  In late trading, 10-year Treasury note prices were down 6/32, yielding 2.600 percent, up from Thursday's 2.578 percent. On the week, 10-year yields have gained 13 basis points. U.S. 30-year bond prices were down 24/32, yielding 3.185 percent, up from 3.145 percent late on Thursday.



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