TOKYO, May 31 2018 : Asian stocks rebounded from a two-month trough today, while the euro enjoyed a respite after sinking to its lowest in 10 months as political turmoil in Italy that had roiled global financial markets showed signs of easing.
MSCI’s broadest index of Asia-Pacific shares outside Japan tacked on 0.3 percent having slumped to its weakest since the start of April yesterday.
A degree of calm, however, returned, with the two anti-establishment parties renewing efforts to form a coalition government rather than force Italy into holding elections for the second time this year.
“The financial markets had been able to assess and digest the situation in Italy over the past few days and it is now time for a bit of reprieve from the turbulence,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.
“The reprieve will allow the market to return their focus back on fundamentals, such as Friday’s U.S. non-farm jobs report.”
The euro stood little changed at $1.1669 EUR= after rallying 1 percent the previous day. The currency had sunk to $1.1510 on Tuesday, its lowest since late July 2017.
The dollar index against a basket of six major currencies dipped 0.1 percent to 94.061 after surging to a near seven-month peak of 95.025 on Tuesday.
The U.S. currency traded at 108.730 yen JPY=, off a low of 108.115 brushed on Tuesday when risk aversion in the broader markets increased investor demand for its Japanese peer, which is often sought in times of market unrest.
The dollar received some support as signs of easing Italian political concerns pulled U.S. Treasury yields up from multi-week lows.
The 10-year Treasury note yield stood at 2.847 percent after sliding on Tuesday to 2.759 percent, its lowest since April 11.
U.S. crude futures inched down 0.2 percent to $68.07 a barrel after gaining 2.2 percent yesterday. Prices had fallen to a six-week low of $65.80 a barrel on Tuesday amid concerns that Saudi Arabia and Russia could increase output.
Brent crude dipped 0.25 percent to $77.31 a barrel after jumping 2.8 percent yesterday. – Reuters