© Reuters. FILE PHOTO: Market prices are reflected in a glass window at the TSE in Tokyo
By Shinichi Saoshiro
TOKYO (Reuters) – Asian shares fell on Monday as investors cut expectations of an aggressive cut in Federal Reserve interest rates, while oil prices rose due to rising tensions in the Middle East after the seizure. of a British oil tanker by Iran.
MSCI's broader Asia-Pacific stock index outside of Japan () was down 0.4%.
Japan's Nikkei () closed with a 0.2% drop in moderate Fed sentiment and caution ahead of the domestic earnings season that begins this week.
The Composite Index of Shanghai () fell by 1%, but all eyes were on the debt of the new STAR technological board of the Nasdaq style of China. It had a wild opening day as expected, with most of the companies on the rise and the circuit breakers jumping into the early trade.
Hong Kong's Hang Seng () fell 0.9%. The KOSPI of South Korea () was flat.
In early European trade, the future Euro Stoxx 50 () of the Pan-American region rose by 0.06%, the futures of the German DAX () rose by 0.02% and the futures of the United Kingdom () by 0.05% .
Global stock markets rose briefly towards the end of last week, after moderate comments from New York Fed President John Williams (NYSE 🙂 raised expectations that the central bank would lower rates by 50 points basic (bp) at its meeting from July 30 to 31.
But the stock markets returned those gains on Friday, with Wall Street shares falling, after the New York Fed rejected Williams' comments saying his speech was not about possible political action at the next Fed meeting. .
Expectations of a larger cut were further reduced after the Wall Street Journal reported that the Fed would likely reduce rates by 25 basis points this month, and could make further cuts in the future given global growth and trade uncertainties.
"The possibility of a 50 basis point cut has almost dissipated after the WSJ report and the New York Fed's attempt to mitigate Williams' previous comments," wrote Kenji Yamamoto, an economist at Daiwa Securities.
The dollar and the yields of the US Treasury bonds increased due to the higher probability of a cut in the lower rate.
The () against a basket of six major currencies remained stable at 97,174 after having risen 0.4% on Friday.
The euro () changed slightly to $ 1.1216 after losing 0.5% on Friday. The dollar rose 0.25% to 108.00 yen.
Benchmark 10-year Treasury yield () stretched modest gains on Friday and rose to 2,062%.
Even so, the wide fall in equity markets limited the increase in yields on Treasury bonds.
"One factor that could guide stocks down this week is the tweets from US President Donald Trump related to trade issues with China," said Junichi Ishikawa, currency strategist at IG Securities.
"The shares could decrease if he continues to make challenging commercial comments aimed at China this week."
Trump kept up the pressure on Beijing last week by renewing the threat of imposing tariffs on another $ 325 billion of Chinese products, even as hopes mounted that the two sides could soon resume face-to-face negotiations in an attempt to End your one year commercial war. .
Oil extends to profits
In commodities, Brent crude futures () rose 1.55% to $ 63.44 a barrel, after an increase of around 0.9% on Friday.
Iran's Revolutionary Guards captured a British-flagged oil tanker in the Strait of Hormuz on Friday after Britain took an Iranian ship earlier this month, causing further tensions along a vital international transport route. Petroleum.
Crude futures in the United States () advanced 0.77% to $ 56.06.
Gold fell from a maximum of six years when the dollar was reaffirmed and expectations of a deep cut in the rate by the Federal Reserve were reduced.