Shares Fall, Dollar Dips Vs Yen after Trump Travel Curbs

تم نشره في Mon 30 January / Jan 2017. 01:00 AM
  • A worker shelters from the rain as he passes the London Stock Exchange in the City of London at lunchtime October 1, 2008. – (REUTERS)

LONDON — Shares fell in Europe and Asia on Monday and the dollar dipped against the safe-haven yen after immigration curbs introduced by Donald Trump added an extra layer of uncertainty to the economic impact of the new US president's policies.

Wall Street appeared headed for a weaker opening, with e-mini futures contracts on the S&P 500 down 0.3 per cent.

The euro fell to an 11-day low against the dollar and German government bond yields pared gains after German inflation in January came in slightly below forecast, easing pressure on the European Central Bank to unwind its stimulus program.

Trump suspended travel to the United States from Syria, Iraq, Iran and four other countries on national security grounds. The executive order, signed on Friday, triggered huge protests in US cities and raised concern among some in markets over the potential impact of other policy moves.

"Concerns on protectionism appear to be rising after President Trump's executive order to restrict immigration," said Adam Cole, head of G10 foreign exchange strategy with RBC in London.

The pan-European STOXX 600 index dropped 0.6 per cent, led by a 2 per cent fall in euro zone banks and drops in commodity related stocks.

UniCredit shares fell nearly 6 per cent after the Italian bank said its end-2016 capital ratios would not meet European Central bank requirements as it prepares to launch a 13 billion euro (USD13.9 billion) rights issue.

Trade in Asian shares was thinned by the Lunar New Year. MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.5 per cent.

Australian shares fell 0.9 per cent. Japan's Nikkei fell 0.5 per cent as the strong yen weighed on exporters.

"Trump always stated these were policies he would implement," said James Woods, global investment analyst at Rivkin Securities in Sydney. "This renews concerns about a trade war with China that would significantly affect both the Asian and the global economy."

The dollar rose 0.5 per cent to a 10-day against a basket of currencies, reversing earlier falls.

The euro fell 0.6 per cent to USD1.0633 and sterling dropped 0.4 per cent to USD1.25, although the yen was up 0.3 per cent at 114.70 per dollar.

In debt markets, German 10-year yields dipped 0.3 basis points to 0.46 per cent after inflation hit a 3 1/2-year high but, at 1.9 per cent on the year, slightly undershot forecasts.

Yields on lower-rated Italian 10-year bonds rose 10 bps to 2.33 per cent.

"Inflation is moving higher and this is fuelling talk about ECB policy, although I expect the ECB is likely to continue to play down tapering," said ING senior rates strategist Martin van Vliet.

The premium investors demand to hold French 10-year bonds rather than German hit its widest in three years after a poll on Sunday showed conservative candidate Francois Fillon, embroiled in a scandal over allegations of misuse of public funds, losing ground to centrist Emmanuel Macron.

Fillon is favourite to win the election, most likely in a run-off with far-right leader marine Le Pen.


A big mover among emerging markets currencies was the South African rand, which fell 1.2 per cent to 13.62 per dollar after reports that President Jacob Zuma was considering a cabinet reshuffle in response to calls for his resignation in November. The rand earlier traded down 1.6 per cent.

Oil prices fell, weighed down by the reduced appetite for risk resulting from the immigration curbs and by signs of data from Baker Hughes showed US drillers added 15 oil rigs last week. Brent crude last traded down 12 cents at USD55.52 a barrel.

Copper fell 0.5 per cent to USD5,871 a tonne, with trade also thinned by the week-long new year holiday in China.