By Rae Wee
SINGAPORE (Reuters) – Asian shares fell in and out of positive territory on Monday, pressured by weakness in Chinese shares, but bitcoin scaled a three-month peak as ‘Trump trades’ continued to rise.
Gold reached another record high on the back of conflict in the Middle East and an extremely tense US presidential election, with the yellow metal expected to remain in favor amid high global uncertainty.
Optimism over the raft of stimulus measures that Beijing first announced in late September has turned to caution in recent days, as investors look for further details on more fiscal support from policymakers.
Although China cut its key interest rates on Monday, the move was expected.
Hong Kong shares were last down 0.6% as China’s blue chip index swung between losses and gains. The index was last trading 0.4% higher, while the Shanghai Composite Index rose 0.36%.
That limited gains in MSCI’s broadest index of Asia-Pacific shares outside Japan, which last rose a marginal 0.11%, a step back in sentiment after U.S. stocks posted a sixth straight week of gains on Friday.
Japan’s Nikkei rose 0.34%.
It may take some time before further details about China’s stimulus measures emerge.
“We may have to wait until late October or early November for concrete plans from the meeting of the Standing Committee of the National People’s Congress,” said Chaoping Zhu, global market strategist at JP Morgan Asset Management in Shanghai.
American election
With about two weeks to go until the November 5 US elections, bets on a Donald Trump victory are increasing in some financial instruments.
The Republican candidate’s tariffs, taxes and immigration policies are seen as inflationary, and therefore negative for bonds and positive for the dollar. He is also seen to have a more favorable stance towards cryptocurrencies.
“It now appears that Trump is ahead in the key battleground states, which suggests he is quite well placed to win back the White House and I think markets have started to take that into account over the last week, with the stronger equities, higher interest rates and the US dollar that is clearly performing. Very, very good and Bitcoin is on track for a 10% gain over the past week,” said Tony Sycamore, market analyst at IG.
Bitcoin was last up 0.5% at $69,100, after hitting its strongest level since July at $69,487 earlier in the session. The world’s largest cryptocurrency gained 9.6% last week and is up more than 8% year to date.
“It’s looking pretty good for bitcoin here. I think it can continue higher,” Sycamore said.
The dollar hovered close to a more than two-month high against a basket of currencies on Monday, with the dollar index last at 103.46.
The pound sterling fell 0.02% to $1.3045, while the euro fell 0.01% to $1.0865.
In the bond market, the yield on ten-year US government bonds rose one basis point to 4.0907%, while the two-year yield was last at 3.9568%. [US/]
Spot gold peaked at a record $2,727.39 an ounce, continuing its rally after rising more than 2% last week.
“One of Trump’s clearest trades so far has been on gold, given his belligerent stance on trade and his willingness to weaponize the dollar, keeping demand for diversification well supported among emerging central banks,” says Arun Sai, senior multi-asset strategist at Pictet Asset Management. .
Oil prices moved higher on Monday after a sharp decline from last week. [O/R]
Brent crude futures were last up 0.4% at $73.36 per barrel, while U.S. crude rose 0.43% to $69.52 per barrel.
(Reporting by Rae Wee; Editing by Edwina Gibbs)
