The dollar weakened and equities retreated as investors turned cautious following a seven-week surge for global stocks. Bonds gained with gold while oil fluctuated.
Haven assets were in favor, with the U.S. currency trading at an eight-month low and 10-year Treasury yields near the lowest since November. The yen’s strength weighed on Japanese shares, while stocks in Sydney fell to the lowest since February. The Aussie dollar swung between gains and losses after the central bank left its benchmark interest rate unchanged.
With central bank policy makers in the U.S. and Europe all in quiet periods ahead of key policy decisions, attention this week has shifted to Britain’s election and testimony from former FBI head James Comey on Thursday. The latest readings on America’s economy did little to divert from the view that growth remains intact, with traders now forecasting a more than 90 percent chance of an interest-rate increase next week.
“There’s a strong sense of wanting to wait-and-see among investors ahead of former FBI director Comey’s testimony and the U.K. elections,” said Yutaka Miura, a senior technical analyst at Mizuho Securities Co. in Tokyo. “With both U.S. shares and Japanese shares trading near fresh highs, there’s no need to jump on the bandwagon now, ahead of key events.”
By: Adam Haigh and Nao Sano (Bloomberg News).
Photo: Bloomberg Quint.
Review: Emerging Market Formulations & Research Unit, Flagship Records.