Aust Dollar Falls Below US72c

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The Australian dollar has softened further as global risk sentiment sours.

At noon (AEDT) on Monday, the currency was trading at US71.71c, down from US72.44c on Friday.

OANDA Australia and Asia Pacific senior trader Stephen Innes said continued oil price falls are sending commodity currencies like the Australian dollar into a tailspin.

The Fed is widely expected to hike rates for the first time in nearly a decade when it meets on Thursday (AEDT).

Source : Market Spectator

Gold Holds Weekly Decline as Fed Interest Rate Decision Looms

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Gold held a weekly loss as investors awaited a decision on a U.S. interest rate increase when the Federal Reserve meets Dec. 15-16.

Bullion for immediate delivery fell as much as 0.3 percent to $1,071.25 an ounce and traded at $1,074 at 8:55 a.m. in Singapore, according to Bloomberg generic pricing. The metal dropped 1.1 percent last week.

U.S. and European stocks slumped at the end of last week as a rout in oil prices and ructions in the junk-bond market boosted investor anxiety ahead of the Fed’s final meeting of 2015. Traders are pricing in 74 percent odds that borrowing costs will be raised for the first time since 2006 at the Federal Open Market Committee meeting, potentially hurting gold as the dollar strengthens.

Source : Bloomberg

Shanghai Composite Index Drops as Offshore Yuan Weakens

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China’s benchmark stock index fell after the offshore yuan weakened for a sixth day.

The Shanghai Composite Index slid 0.9 percent to 3,404.36 at 9:31 a.m. local time. Fosun International Ltd. tumbled 9.9 percent in Hong Kong after shares resumed trading. Fosun was suspended on Friday amid a Caixin report that billionaire Guo Guangchang, the chairman of Fosun Group, was missing. The yuan traded in Hong Kong slid 0.29 percent to 6.5511 a dollar, extending a six-day drop to 1.6 percent, according to data compiled by Bloomberg.

Source : Bloomberg

Asian Stocks Join Global Selloff as Commodity Producers Retreat

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Asian stocks joined a global selloff as concern about turmoil in the credit and commodities markets ahead of this week’s Federal Reserve meeting overshadowed a batch of better-than-expected Chinese economic data.

The MSCI Asia Pacific Index dropped 1.4 percent to 127.69 as of 9:05 a.m. in Tokyo, falling for a fifth day in its longest stretch of declines since the measure’s August slump. The Standard & Poor’s 500 Index sank 1.9 percent on Friday as crude traded below $36 a barrel and asset managers were routed after a high-yield mutual fund suspended redemptions. Traders see a 74 percent chance the Fed will increase rates on Dec. 16, futures show.

Third Avenue Management last week said it will liquidate a $788.5 million credit mutual fund and delaying distribution of investor money so it can avoid unloading securities at fire-sale prices. Stone Lion Capital Partners suspended redemptions in its $400 million high-yield fund.

The credit-market turmoil comes on the cusp of one of the most anticipated weeks of the year for investors. Tightening policy would solidify the Fed’s divergence from other major central banks, with policy makers in Europe and Japan still emphasizing measures to support growth.

Source : Bloomberg

Japanese Stocks Fall as Rout in U.S. and Europe Spreads to Asia

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Japanese stocks fell as a rout in U.S. and European equities on Friday spread to Asia. Energy explorers led declines.

The Topix index dropped 1.8 percent to 1,521.62 as of 9:01 a.m., heading for its lowest close since Oct. 22, as all of its 33 industry groups declined. The Nikkei 225 Stock Average lost 1.7 percent to 18,896.42. U.S. and European stocks slumped at the end of last week as a rout in oil prices and ructions in the junk-bond market boosted investor anxiety ahead of the Federal Reserve’s final meeting of 2015.

E-mini futures on the Standard & Poor’s 500 Index added 0.1 percent after the underlying measure dropped 1.9 percent on Friday to cap the worst week for U.S. stocks since August. The Stoxx Europe 600 Index fell 2 percent.

A wave of risk aversion swept over markets Friday as OPEC’s decision to scrap output limits sent crude oil prices to the lowest level since 2008 in London. Asset managers slid in the U.S. after a high-yield mutual fund run by Third Avenue Management suspended redemptions. They were then joined by Stone Lion Capital Partners, fueling concern over stress in the high-risk debt market.

The credit-market turmoil comes as traders price in 74 percent odds that the Fed will raise interest rates on Wednesday, ending the era of near-zero borrowing costs. Tightening policy would solidify the Fed’s divergence from other major central banks, with policy makers in Europe and Japan still emphasizing measures to support growth.

The Bank of Japan’s fourth-quarter Tankan survey showed a measure of confidence among large manufacturers held at 12, beating economist estimates for it to slip to 11.

Source : Bloomberg