Dollar finds floor as Treasuries hold steady in Asia trading

Markets were settling down in morning Asia trading as the dollar found a floor, Treasuries notched marginal gains and crude prices steadied after two days of tumult spurred by the US Federal Reserve’s decision to raise interest rates on Wednesday.

The dollar was steadying in early Asia trade, down only 0.1 per cent at 100.28 after falls over the previous two days took it 1.4 per cent lower from its Tuesday close.

Forex market movements were similarly muted overall, with emerging market currencies largely holding on to or building marginally on previous day’s gains. The Taiwanese dollar was the region’s top performer, firming 0.4 per cent to TW$30.613 against the greenback and continuing a three-day streak that has brought it to the strongest level since June 2015.

South Korea’s won inched up on the dollar as well, with a rise of 0.3 per cent to Won1,130.95 bringing it 1.6 per cent stronger since Tuesday’s close. The Australian dollar was flat at $0.7676 after walking back some of its post-hike gains on Wednesday.

In Sydney the S&P/ASX 200 was up 0.3 per cent as the industrial, financial and information technology segments each rose 0.6 per cent. Shares in US-focused provider Ramsay Health Care rallied 4.6 per cent after Michael McCarthy, chief market strategist at CMC Markets, suggested a recent drop in the stock’s price was due to a technical sell-off.

Tokyo’s Topix index was off 0.5 per cent with losses across the board, though utilities and health care stocks were worst hit with falls of 1.3 per cent and 1 per cent, respectively. Shares in Toshiba Corp were up 5 per cent on reports the beleaguered Japanese conglomerate had attracted 10 potential bidders for its semiconductor business.

In Hong Kong the benchmark Hang Seng index was up 0.1 per cent in morning trade as falls in energy and consumer discretionary stocks were offset by a rally in the telecoms segment. State-owned Chinese providers China Mobile and China Unicom were up 1.8 per cent and 2.6 per cent, respectively. China Unicom was building on gains from the previous session after it revealed net profit growth was up 50 per cent year on year in the first two months of 2017 following a 94 per cent drop in annual net profit in 2016.

Sovereign bond markets in the region returned to relative calm after the increased volatility following the Fed’s rates decision.

Treasuries were making marginal gains with yield, which moves inversely to price, on the 10-year US note down as much as 1 basis point to 2.533 per cent. That was still up from Thursday’s post-hike dip to below the 2.5 per cent mark, however.

Regional government bonds were faring less well, as the 10-year Australian note’s yield up 4bp to 2.852 per cent after a drop of 10bp the day prior. The equivalent Japanese note was steady at 0.065 per cent, holding steady after yield fell 2bp on Thursday.

Oil prices were steady in the morning session after late-day volatility in the US. International benchmark Brent crude was up 0.1 per cent at $51.78 a barrel, while US marker West Texas Intermediate had notched a 0.2 per cent gain to $48.84.

A rally in gold over the past two days was easing in the Asia morning session as the yellow metal traded flat at $1,227.02 per ounce.

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