Geopolitical tensions weigh on global markets - 6.1.2020

Dollar weakening accelerated

US stock market pulled back on Friday after news the US airstrike killed Iran’s military commander. The S&P 500 slid 0.7% to 3234.85, booking 0.2% loss for the first trading week. Dow Jones industrial lost 0.8% to 28634.8. The Nasdaq fell 0.8% to 9020.77. The dollar strengthening slowed after weaker than expected US manufacturing report. The live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, added 0.1% to 96.86 but is lower currently. Futures on stock indexes point to lower openings today.

DAX 30 fall leads European stocks retreat

European stocks retreated on Friday. Both UR/USD and GBP/USD continued their declines on Friday with both pairs gaining currently. The Stoxx Europe 600 Index slid 0.3% led by airline and travel stocks. The DAX 30 fell 1.3% Friday to 13219.14 with report unemployment in Germany rose more than expected in December providing little support. France’s CAC 40 however edged up 0.04% and UK’s FTSE 100 advanced 0.2% to 7622.40.

Nikkei leads Asian Indexes retreat

Asian stock indices are mostly lower today after President Trump on Sunday threatened a “major retaliation” against Iran if Tehran takes any action after vowing a “hard revenge awaits criminals” following US airstrike that killed its top general. Nikkei dropped 1.9% to 23204.86 after reopening in the new year despite resumed yen slide against the dollar. China’s markets are falling after a report China’s services sector expanded at a slower pace in December: the Shanghai Composite Index is 0.01% lower and Hong Kong’s Hang Seng Index is down 0.9%. Australia’s All Ordinaries Index however gained 0.03% with Australian dollar climb against the greenback resumed.

Saudi Aramco mirrors Brent’s moves

Brent futures prices are edging lower currently after extending gains today. Prices jumped on Friday after US airstrike killed Iranian military commander. Energy Information Administration reported that US crude supplies fell by above expected 11.5 million barrels last week: Brent for March settlement added 3.6% to $68.60 a barrel Friday. Saudi Aramco shares fell as low as 34.45 riyals ($9.18) in early trade today. It is their lowest level since Aramco shares began trading on December 11. They have lost almost 11% since hitting a high of 38.70 riyals. The IPO was priced at 32 riyals per share, valuing Aramco at $1.7 trillion, making it the world’s most valuable company.

Gold rallies

Gold prices are inching lower after hitting near seven year high today. Prices ended near four month high on Friday on heightened haven asset demand : February gold added 1.6% on Friday.