Reliance Trading Co. Limited – Stocks Slide Globally – Gold and Silver Safe Havens Benefit
Global stocks extended already substantial losses on Tuesday as China's yuan currency dropped to an 11-year low after Washington designated Beijing a currency manipulator in a rapid escalation of the U.S.-China trade war.
By: Reliance Trading Co. Limited
The Trump administration's dramatic move against China hastened the risk aversion seen in global markets this week. On Monday, China let the yuan slide in response to the latest U.S. tariffs, which are expected to further aggravate trade tensions between the world's two largest economies.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.5% to its lowest level since January.
The Shanghai Composite Index retreated 2%.
Japan's Nikkei shed 2.1%, Australian stocks fell 2.3% and South Korea's KOSPI slid 1.6%.
S&P 500 futures were down 0.5% in Asian trade. Wall Street's major indexes posted their biggest percentage drop of the year on Monday on concerns about the U.S.-China trade war.
MSCI's All Country World Index, which tracks shares in 47 countries, extended last week's slide and slumped 2.5% to a two-month low on Monday.
The Chinese yuan onshore fell to an 11-year low on Tuesday, brushing 7.0699 per dollar. In a symbolic move, Beijing let the yuan breach 7-per-dollar on Monday for the first time since late 2008.
The Japanese yen, a perceived safe-haven in times of market turmoil and political tensions, touched a seven-month high of 105.520 per dollar before slipping back to 106.290.
The Swiss franc, another currency sought in times of turmoil, has gained roughly 1% against the dollar this week. It touched a six-week peak of 0.9700 franc per dollar.
The 10-year U.S. Treasury yield extended sharp falls overnight and declined to 1.672%, it's lowest since October 2016.
Japan's 10-year yield fell to a three-year trough of minus 0.215%.
Brent crude oil futures plumbed a seven-month low of $59.07 per barrel as the trade war raised concerns about lower demand for commodities. Brent last traded at $59.89.
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