ECONOMY
On Friday , Asian stocks struggled to track Wall Street’s exuberance about a possible U.S. rate cut next month as anxiety over Sino-U.S. trade negotiations clouded the investor mood in the region.
FOMC alone won’t be able to sustain Asian equities indefinitely until some kind of solution can be worked out for the U.S.-China trade war at the G20, since the region is particularly vulnerable to the conflict.
Investors have pinned hopes on the United States and China reaching some sort of compromise at the sidelines of the G20 summit in Japan on June 28-29.
Tempering appetite in Asia were fresh worries about Middle East tensions, after Iran shot down a U.S. military drone, raising fears of a military confrontation between Tehran and Washington and pushing the crude oil price higher.
The S&P 500 hit a record high on Thursday after this week’s Federal Reserve meeting boosted expectations that the central bank will cut interest rates as soon as next month to keep the U.S.-China trade war from stalling economic growth.
The Fed signaled easing after the conclusion of its policy setting meeting on Wednesday, saying it was ready to battle growing global and domestic economic risks.
BONDS
The benchmark 10-year U.S. Treasury yield surged in price and its yield fell below 2% for the first time in 2-1/2 years on Thursday. It last stood at 2.016%.
The German 10-year bund yield touched a record low of minus 0.329% this week while Japan’s 10-year yield fell to a near three-year trough of minus 0.185% overnight.
OIL
Crude oil rose to three-week highs after Iran shot down a U.S. military drone, raising fears of about fresh conflict in the Middle East.U.S. crude oil futures were up 0.58% at $57.40 per barrel after rallying more than 5% the previous day.
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