The US dollar rebounded from three-year lows and US crude slid more than 1 percent yesterday after news al-Qaeda leader Osama bin Laden was killed in a firefight with US forces reduced the perception of security risks facing the US.
The news appeared to have provided a reason for investors to unwind extended positions in many assets, including very short dollar positions in holiday-thinned Asian trade.
Earlier, investors had a taste of how vulnerable overbought assets can be to a sudden sell-off when silver dropped 10 percent after hitting a record high last week and the Australian dollar slumped nearly a full cent after reaching a post-float peak of A$1.1011 to the US dollar.
Photo: AFP
US President Barack Obama said the al-Qaeda leader was killed in a firefight with US forces and his body was recovered.
US stock index futures added to gains, Japan’s Nikkei average rose 1.4 percent on the day, while US Treasury prices fell.
Many Asian markets including China, Hong Kong, Singapore and Thailand were shut for public holidays, leaving MSCI’s gauge of Asian stocks excluding Japan up a mere 0.2 percent.
“By lowering national security risks overall, this is likely to bolster equity markets and lower US Treasury prices in a reverse flight to quality movement,” said Mohamed El-Erian, CEO and co-chief investment officer at PIMCO, which oversees US$1.2 trillion in assets.
“Oil markets are likely to be the most volatile given their higher sensitivity to the tug of war -between lower risk overall and the possibility of isolated disturbances in some parts of the Middle East and central Asia,” he said.
US crude fell more than 1 percent to a session low of US$112.21, retreating from a 31-month peak of US$114.18 set on Friday.
The dollar index, which tracks its performance against a basket of major currencies, jumped from a three-year low of 72.813 to 73.227.
US Treasury yields pushed higher across the curve with the 10-year rising to 3.308 percent from a six-week trough of 3.273 percent.
Meanwhile, silver was nursing heavy losses after skidding about 10 percent to a low of US$42.58. It last stood at US$44.64, off a record high of US$49.51 set last week. Gold fell to US$1,548 from an all-time high of US$1,575.79.
Still, once the dust settles, analysts expect the recent trends, including a weak US dollar and higher commodity prices, to resume, especially given that the US Federal Reserve in no hurry to tighten its ultra-loose monetary policy.
“The economic data in the US is still going to be on the soft side and the market is going to keep a lid on yields and that is going to help push down the dollar,” said Joseph Capurso, strategist at Commonwealth Bank.
Some were also skeptical of whether bin Laden’s death would reduce the security risks facing the US.
“It doesn’t change much about the energy situation and doesn’t change much about the ongoing battle with radical Islamists,” said Chip Hanlon, president of Delta Global Advisors in California. “It’s sort of like the news when we heard [former Iraqi president] Saddam [Hussein] was caught, in the end it didn’t change much fundamentally and I don’t think this will either.”
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained