Dollar’s downward momentum eases as oil prices steady

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Market volatility dissipated in Asia trade on Friday morning as the dollar’s downward momentum eased and oil prices inched higher after recovering from a sudden drop the evening prior.

Stock in Samsung Electronics fell as much as 2 per cent at the open on Friday after the early-morning arrest of Lee Jae-yong, heir apparent of Samsung Group. The arrest of Mr Lee for bribery, embezzlement and perjury was made in connection with an investigation by a special prosecutor into the massive corruption scandal that has engulfed President Park Geun-hye. The Kospi index was down 0.2 per cent.

Hong Kong-listed shares in MGM China fell as much as 5.1 per cent after the casino operator announced underwhelming fourth-quarter results that showed mass-market revenue for the period down 2 per cent from the previous year. Shares in rival Sands China were also off as much as 1.7 per cent. The benchmark Hang Seng index was down just 0.1 per cent.

Shares in Japanese conglomerate SoftBank dropped as much as 1.5 per cent as investor enthusiasm appeared to wane for the company’s $3.3bn acquisition of US alternative asset manager Fortress Investment Group. The stock had erased the entirety of its post-announcement gains as of mid-morning trade. Tokyo’s Topix index was off 0.4 per cent.

A retreat by the dollar was leveling off on Friday after the dollar index, which measures the greenback against a basket of peers, dropped 0.7 per cent on Thursday. The index was flat in Asia morning trade.

China’s renminbi notched a minor landmark moment overnight as the offshore exchange rate against the dollar briefly weakened past the level of its more tightly-regulated onshore counterpart. The onshore rate quickly weakened 0.2 per cent to Rmb6.8625 per dollar at the open in Asia, however, restoring the spread as the offshore rate remained virtually flat at Rmb6.8501.

A Thursday rally in US government bonds pared back in Friday morning trade. Yield, which moves inversely to price, on 10-year US Treasuries rose 1 basis point to 2.459 per cent after closing the previous day down 5bp.

In Asian markets the 10-year government bonds for Japan, Australia and South Korea were all 1bp lower, with Australia’s notes the only loser in the region thanks to a 1bp rise.

Oil prices were settling down in Asia trading on Friday after a sharp dip the previous evening as concerns about rising crude stockpiles in the US.

Brent, the international benchmark, was up 0.2 per cent at $55.77 a barrel, having fallen as much as 1.1 per cent on Thursday. The US marker, West Texas Intermediate, was up by the same amount at $53.47.

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