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Crude and Dollar Continue rising While; Equities Are On the Edge

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The United States Treasury yields steadied while its Greenback could extend its weekly gain. As a result, the dollar is on track for the largest one-week increase after February. However, the same cannot be said in respect of shares that are resisting holding on to nerves after Asia witnessed a downtrend on Friday. As far as India is concerned, stock market witnessed lackluster trading despite solid results and bonus announcements from TCS. Both the BSE’s Sensex and NSE’s Nifty closed the day with a modest loss on Friday.

Europe Traded Higher

According to a Bloomberg quint report, the futures of equity-index edged lower whereas the Stoxx Europe 600 managed to trade higher. As a result, shares in the United Kingdom has outperformed even as the domestic currency witnessed weakness. This was due to the dampening of expectations for a possible rate hike next month after Bank of England Governor; Mark Carney has belied any such hopes recently. Aside from that, reports suggested that there existed disagreements in BREXIT negotiations on the Irish border.

Following the slashing of bets on a possible rate hike in May by Britain’s central bank, gilts witnessed a reversal of fortune when the bond pared some of the slump seen yesterday. Treasury yield was held above 2.9 percent while German bunds steadied. At last check, Euro has shed 0.31 percent compared to the American currency, while British pounds edged down 0.11 percent.

Aside from the bond, WTI crude has extended its gain to hit a three-year high on Friday. However, the metal markets rally suffered a setback to bring down the Bloomberg Commodity Index weaker for the second day.

Bond market measurements suggested that the market is expecting an increase in the inflation rate in the United States following the scorching gains seen in metals from aluminum to nickel. This apart, traders have focused on the Treasury Department whether it was thinking of emergency law to restrict investments from China in any sensitive technologies. Any announcement could have the potential to drag down the overall sentiment of the stock market though earlier reports suggested about a possible rapprochement.

Key Movements

As far as the Indian currency is concerned, it has weakened to hit the lowest after March 2017. This is despite Reserve Bank of India’s minutes suggesting an unexpected hawkish tilt. For quite some time, the central bank has kept its rates unchanged though oil price remains a big concern for the policymakers since it could affect the retail inflation rate.

Another key movement is that the Bloomberg Dollar spot Index advanced 0.3 percent while the Japanese Yen skid 0.3 percent. Similarly, while Germany’s ten-year yield fell one basis point to 0.59 percent, Britain’s ten-year yield witnessed a fall of three basis points to 1.5 percent, which is the biggest drop in over three weeks. As far as a commodity is concerned, Gold fell 0.4 percent to $1,340.28 per ounce whereas LME copper dipped 0.1 percent. In the same way, Germany’s DAX fell 0.4 percent while France’s CAC 40 index managed a gain of 0.1 percent. S&P500 index futures also fell 0.5 percent.

Viraj Shah likes calling himself the owner here. A trader who likes writing, technical analysis, consulting and has been investing in stocks from past 8+ years. He wants to share his knowledge through Thefinancetime. He has faced a lot of ups and downs but that has not stopped him.. We all call him the PROFESSOR of the TheFinanceTime.

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