NZ Dollar Retreats As Asian Stock Markets Traded Lower

On Wall Street on Monday, the Dow Jones Industrial Average closed at a record high for the fifth straight session, and the S&P 500 marked its second straight closing record high, as higher U.S. Treasury yields helped lift financial shares.

-The yen slid 0.5 percent to 112.16 per dollar.

In Europe, the FTSE 100 index of leading British shares was unchanged at 7,273 while Germany’s DAX was 0.3 percent higher at 12,612.

The New Zealand dollar remained above 73 US cents but barely budged on the day as markets await the latest New Zealand political opinion poll ahead of Saturday’s general election and the outcome of the US Federal Reserve’s Open Market Committee meeting. Obviously if the Fed comes across as more dovish than hawkish then one would expect the opposite reaction in these markets.

The U.S. dollar rose and bond yields jumped to their highest levels in six weeks on Wednesday after the Federal Reserve announced a plan to start shrinking its balance sheet in October and signalled one more rate hike later this year. “I think $1,300, $1,290 is certainly a good base for gold unless the Fed changes its wording with regards to how many hikes there will be in the coming months”, the trader said. Tokyo’s Nikkei .n225 surged 2 percent to its highest close in more than two years as investors drew confidence from a weakening yen and hopes of a snap election underpinned the market.In the US bond market, prices were near flat. France’s CAC gained 0.1 per cent to 5,244.17.

“North Korea poses such a binary risk that it’s very hard to price, and at the moment investors just have to look through it”, said Mike Bell, global market strategist at JP Morgan Asset Management.

South Korea’s Kospi was off 0.16% at 2,412.20, while the Hang Seng Index in Hong Kong was up 0.27% at 28,127.80. The Nasdaq composite lost 0.1 percent to 6,456.04.

Carmakers were charging in Seoul, while retailers fell and technology stocks were mixed – Hyundai Motor was up 1.43%, Lotte Shopping slid 4.55% and Samsung Electronics was 0.19% firmer.

Analysts said the market will also be looking for clues of whether the Fed will raise rates in December.

Analysts said that Japanese share prices rallied as concerns over North Korea, the United States economy and a higher yen receded. Meantime, Nymex crude oil futures are higher this morning.

OIL: Benchmark U.S. crude rose 59 cents to $50.49 per barrel on the New York Mercantile Exchange.

USA crude CLcv1 fell 43 cents to settle at $49.48 a barrel, while Brent LCOcv1 declined 34 cents to settle at $55.14.

Brent crude futures last stood at $55.83, down around one per cent from late USA levels as United States benchmark West Texas Intermediate (WTI) fell to $50.14.

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