Russia-Turkey Tensions See Increased Demand for Safe Haven Assets
November 25, 2015 8:01 am
Asian equity markets were on the fence today as geopolitical tensions increased after Turkey shot down a Russian fighter jet. MSCI’s index of Asia-Pacific shares outside of Japan edged up 0.1 percent, however, equities in Hong Kong, Australia and South Korea fell. Japan’s Nikkei 224 fell 0.4 percent to 19847.58 whilst Shanghai’s equity market edged up 0.88% to 3647.93.
The U.S. Dollar was a little weaker due to the geopolitical tensions between Turkey and Russia after Turkey shot down a Russian jet; this spurred demand for safe-haven assets such as US Treasuries, driving their yields lower. The benchmark US 10 year note yielded 2.239 percent after touching a 3-week low of 2.206 percent overnight. The Dollar index against a basket of major currencies fell to 99.528, retreating from an 8-month peak of 100.000. Against the Yen, the Dollar fell to a 1-1/2 week low of 122.27 before returning to test 122.43. in addition the EUR gain 0.1% to $1.0655.
In the commodity markets the incident between Turkey and Russia briefly spurred oil supply fears and sent crude prices higher overnight to 2-week highs of 43.13. Prices of industrial metals such as zinc, copper and nickel had bounced on the back of the Dollar’s retreat. However, industrial metals are seen as remaining under pressure in the long term with an expected Federal Reserve interest rate rise in December which may underpin the US dollar. Today’s data releases from the US kickoff at 13:30 GMT with Personal Consumption Expenditures, personal income initial jobless claim and durable goods orders. Then just after the US equity market opens we have US house price index Services and composite PMI data along with a consumer sentiment index, with EIA oil figures at 15:00 GMT.
Asian equity markets were on the fence today as geopolitical tensions increased after Turkey shot down a Russian fighter jet. MSCI’s index of Asia-Pacific shares outside of Japan edged up 0.1 percent, however, equities in Hong Kong, Australia and South Korea fell. Japan’s Nikkei 224 fell 0.4 percent to 19847.58 whilst Shanghai’s equity market edged up 0.88% to 3647.93.
The U.S. Dollar was a little weaker due to the geopolitical tensions between Turkey and Russia after Turkey shot down a Russian jet; this spurred demand for safe-haven assets such as US Treasuries, driving their yields lower. The benchmark US 10 year note yielded 2.239 percent after touching a 3-week low of 2.206 percent overnight. The Dollar index against a basket of major currencies fell to 99.528, retreating from an 8-month peak of 100.000. Against the Yen, the Dollar fell to a 1-1/2 week low of 122.27 before returning to test 122.43. in addition the EUR gain 0.1% to $1.0655.
In the commodity markets the incident between Turkey and Russia briefly spurred oil supply fears and sent crude prices higher overnight to 2-week highs of 43.13. Prices of industrial metals such as zinc, copper and nickel had bounced on the back of the Dollar’s retreat. However, industrial metals are seen as remaining under pressure in the long term with an expected Federal Reserve interest rate rise in December which may underpin the US dollar.
Today’s data releases from the US kickoff at 13:30 GMT with Personal Consumption Expenditures, personal income initial jobless claim and durable goods orders. Then just after the US equity market opens we have US house price index Services and composite PMI data along with a consumer sentiment index, with EIA oil figures at 15:00 GMT.
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