Asia looks to safer shores in US assets as virus spreads
Skip to main content
  • Home
  • Economy
    • Aviation
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Fact Check
    • Family
    • Food
    • Game Reviews
    • Good Practices
    • Habitat
    • Humour
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wealth
    • Wellbeing
    • Wheels
  • Epaper
  • More
    • Subscribe
    • Videos
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Games
    • Long Read
    • Interviews
    • Offbeat
    • Podcast
    • Quiz
    • Tech
    • Trial By Trivia
    • Magazine
  • বাংলা
The Business Standard

Sunday
February 05, 2023

Sign In
Subscribe
  • Home
  • Economy
    • Aviation
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Fact Check
    • Family
    • Food
    • Game Reviews
    • Good Practices
    • Habitat
    • Humour
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wealth
    • Wellbeing
    • Wheels
  • Epaper
  • More
    • Subscribe
    • Videos
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Games
    • Long Read
    • Interviews
    • Offbeat
    • Podcast
    • Quiz
    • Tech
    • Trial By Trivia
    • Magazine
  • বাংলা
SUNDAY, FEBRUARY 05, 2023
Asia looks to safer shores in US assets as virus spreads

Global Economy

Reuters
21 February, 2020, 10:20 am
Last modified: 21 February, 2020, 10:23 am

Related News

  • Covid remains a public health emergency, says WHO
  • Asia's most powerful passports 2023
  • Asia's tourist hotspots prepare for boom as China relaxes Covid rules
  • Potential China wave is 'wild card' for ending Covid emergency: WHO advisors
  • WHO chief hopes Covid will no longer be emergency next year

Asia looks to safer shores in US assets as virus spreads

Reuters
21 February, 2020, 10:20 am
Last modified: 21 February, 2020, 10:23 am
Investors look at screens showing stock information at a brokerage house in Shanghai, China January 16, 2020. REUTERS/Aly Song/File Photo
Investors look at screens showing stock information at a brokerage house in Shanghai, China January 16, 2020. REUTERS/Aly Song/File Photo

Asian shares were under water on Friday as fears over the creeping spread of the coronavirus sent funds fleeing to the sheltered shores of US assets, lofting the dollar to three-year highs.

Even Wall Street turned soggy late on Thursday on news of increased infections in Beijing and abroad. South Korea reported 52 new confirmed cases on Friday.

Corporate earnings are increasingly under threat as US manufacturers, like many others, scramble for alternative sources as China's supply chains seize up.

The International Air Transport Association (IATA) estimated losses for Asian airlines alone could amount to almost $28 billion this year, with most of that in China.

"COVID-19 anxiety has risen to a new level amid concerns of virus outbreaks in Beijing and outside of China," said Rodrigo Catril, a senior FX strategist at NAB.

"US and EU equity markets have been sold across the board with core global yields benefiting from safe-haven flows," he added. "Asian currencies have suffered sharp falls, including the yen as recession fears trump the usual safe-haven demand."

Adding to the tension was the imminent release of flash manufacturing surveys for a range of countries. Japan's index dropped to 47.6 in February, from 48.8, marking the steepest contraction in seven years.

Gold shined as a safe harbor and rose to its highest in seven years. The yellow metal was last at $1,623.94 having added 2.5% for the week so far.

Equities lagged badly, with MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS off 0.8% on Friday in nervous trade.

South Korea slid 1.2% as the virus spread in the country, while Japan's Nikkei eased 0.3% even as a plunge in the yen promised to aid exporters.

Shanghai blue chips  were holding their nerve thanks to the promise of more policy stimulus at home. But both E-Mini futures for the S&P 500 and EUROSTOXX 50 STXEc1 slipped 0.3%.

The Dow had lost 0.44% on Thursday, while the S&P 500 lost 0.38% and the Nasdaq  0.67%.

BUYING BONDS

Sovereign bonds benefited from the mounting risk aversion, with yields on 30-year US Treasuries US30YT=RR falling below the psychologically important 2% level to the lowest since September 2019.

Yields on 10-year notes US10YT=RR were down 8 basis points for the week at 1.50%, lows last seen in September.

"The US 10-year has rallied more than all the other liquid G5 bond market alternatives," said Alan Ruskin, global head of G10 FX strategy at Deutsche Bank. 

"Treasuries attract foreign bond inflows because of their higher yields, and because higher yields leave more scope for yields to decline."

Those flows were a boon to the US dollar, boosting it to multi-month peaks against a raft of competitors this week.

The most spectacular gains came on the Japanese yen as a run of dire domestic data stirred talk of recession there and ended months of stalemate in the market.

The dollar was last lording it at 112.02 yen and set for its best week since September 2017 with a rise of 2%. Another casualty of its close trade ties with China was the Australian dollar, which plumbed 11-years lows.

The euro fared little better, touching lows last seen in April 2017 to be trading at $1.0787.

Against a basket of currencies, the dollar hit a three-year top at 99.910 .DXY having climbed 0.8% for the week so far.

Analysts at RBC Capital Markets noted the dollar's outperformance had brought it close to breaching a host of major chart barriers, which could supercharge its rally.

"This has allowed the DXY to approach the 100.00 threshold – with a key resistance hurdle at 100.30 now within sight," they wrote in a note. The same went for the Chinese yuan.

"USD/CNH is now poised to pierce resistance at 7.0559 after the USD hit new cycle highs against other EM currencies."

Oil prices faded a little on Friday, but were still up more than 3% for the week.

US crude CLc1 dipped 38 cents to $53.50 a barrel, while Brent crude LCOc1 futures eased 39 cents to $58.92.

Top News

Asia / US assets / Coronavirus

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Oil’s New Map: How India turns Russia crude into the west's fuel
    Oil’s New Map: How India turns Russia crude into the west's fuel
  • Photo: Collected
    Adani’s power to come to Bangladesh in first week of March: Nasrul Hamid
  • Service exporters to get foreign currency retention quota facility
    Service exporters to get foreign currency retention quota facility

MOST VIEWED

  • Jerome Powell, chairman of the US Federal Reserve, speaks during a news conference. Photographer: Al Drago/Bloomberg
    When the Fed's suspected of bluffing, it has a problem
  • Why Pakistan is struggling to get another IMF bailout
    Why Pakistan is struggling to get another IMF bailout
  •  Gautam Adani, center.Photographer: Tomohiro Ohsumi/Bloomberg
    Billionaires from Hong Kong to Arkansas exposed to Adani crash
  • FILE PHOTO: The logo of the Securities and Exchange Board of India (SEBI) is pictured on the premises of its headquarters in Mumbai, India March 1, 2017. REUTERS/Shailesh Andrade/Files
    On Adani row, SEBI says it's committed to ensuring market integrity
  • A broker monitors share prices while trading at a brokerage firm in Mumbai January 15, 2019/ Reuters
    Indian watchdog tells investors markets stable despite Adani rout
  • Demonstrators wait in line after entering the Presidential Secretariat premises, after President Gotabaya Rajapaksa fled, amid the country's economic crisis, in Colombo, Sri Lanka July 10, 2022. File Photo: REUTERS/Dinuka Liyanawatte
    Sri Lanka marks independence anniversary amid economic woes

Related News

  • Covid remains a public health emergency, says WHO
  • Asia's most powerful passports 2023
  • Asia's tourist hotspots prepare for boom as China relaxes Covid rules
  • Potential China wave is 'wild card' for ending Covid emergency: WHO advisors
  • WHO chief hopes Covid will no longer be emergency next year

Features

Say it with Colours

Say it with Colours

8h | Mode
Photo: Courtesy

From 'Made in Bangladesh' to 'Designed in Bangladesh'

10h | Panorama
Google must adjust to a world where content is increasingly generated by AI. Photo: Bloomberg

Google will join the AI wars, pitting LaMDA against ChatGPT

7h | Panorama
The megaproject Rooppur Nuclear Power Plant has a debt of Tk90,474 crore. Photo: Courtesy

Projects funded with debt need to be selected prudently, and implemented timely

8h | Panorama

More Videos from TBS

ICB to withdraw Padma Bank Investment as return

ICB to withdraw Padma Bank Investment as return

1h | TBS Insight
Kiara Advani & Sidharth Malhotra's Wedding Update

Kiara Advani & Sidharth Malhotra's Wedding Update

1h | TBS Entertainment
Lack of coordination, policy biggest problems

Lack of coordination, policy biggest problems

4h | TBS Round Table
Industries panicked about continuing stresses on profitability

Industries panicked about continuing stresses on profitability

6h | TBS Round Table

Most Read

1
Leepu realised his love for cars from a young age and for the last 40 years, he has transformed, designed and customised hundreds of cars. Photo: Collected
Panorama

'I am not crazy about cars anymore': Nizamuddin Awlia Leepu

2
The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., September 4, 2018. REUTERS/Yuri Gripas/File Photo
Economy

IMF approves $4.7 billion loan for Bangladesh, calls for ambitious reforms

3
Fund cut as Dhaka's fast-track transit projects on slow spending lane
Infrastructure

Fund cut as Dhaka's fast-track transit projects on slow spending lane

4
Photo: Collected
Court

Japanese mother gets guardianship of daughters, free to leave country

5
Belal Ahmed new acting chairman of SIBL
Banking

Belal Ahmed new acting chairman of SIBL

6
Photo: Collected
Startups

ShopUp secures $30m debt financing to boost expansion, supply chain

EMAIL US
[email protected]
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Privacy Policy
  • Comment Policy
Copyright © 2023
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - [email protected]

For advertisement- [email protected]