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Risk-off.

Investor anxiety helped US treasuries and safe haven assets rally on Monday even as US stocks began the week on the back foot.

The S&P 500 dipped 0.2 per cent to 2,292.47, the Dow Jones Industrial Average declined 0.1 per cent to 20,057.43. Meanwhile, the Nasdaq Composite fell 0.3 per cent to 5,652.74 as momentum in the Trump trade appeared to be fading again. The downbeat tone came after the Dow posted its best day in two months on Friday.

Meanwhile, investors flocked to so-called safe haven assets, with Treasury prices advancing. The yield on the US 10-year note, which moves inversely to price, dropped 3.9 basis points to 2.426 per cent. Meanwhile the Japanese yen appreciated 0.2 per cent against the US dollar.

Elsewhere, gold prices climbed 0.5 per cent to $1,226.45 a troy ounce. David Rosenberg at Gluskin Sheff noted that gold has been an “effective” hedge in “turbulent geopolitical times”.

“All we know is that what deregulation and tax reform are all positives for risk appetite, there is considerable offset and a need for insurance policies from the heightened international tension and uncertainty that also has come to the fore with this brand new style of US politics”.

Copyright The Financial Times Limited 2017. All rights reserved.
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