Yen jumps, Asian futures fall on tensions in the Middle East: the markets collapse

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(Bloomberg) – Equity futures declined and the yen rose as tensions escalated in the Middle East as Asian financial markets returned to full strength after the New Year holidays.

The Japanese currency reached a three-month high after the United States killed an Iranian military commander in Iraq. Japanese equity futures also fell, while Australian contracts remained largely unchanged. The S&P 500 index posted its biggest loss after the murder on Friday, which threatened to escalate violence in the Middle East.

Tensions clouded broadly positive outlook for risk assets at the beginning of 2020, and a US-China phase 1 trade deal is expected to be signed later this month. China's efforts to support economic growth and signs of stabilization in Chinese manufacturing are also hoping for a recovery in trade.

All major Middle East stock indicators fell on Sunday as the security situation appeared to be deteriorating. Iran said it would no longer adhere to uranium enrichment limits, while President Donald Trump said the U.S. had identified 52 Iranian sites that would be affected if Tehran took revenge on its murdered General Qassem Soleimani.

Treasures rose to safety, and on Friday the oil rose in the wake of the murder.

Here are some events you should see for this week:

India reports its annual GDP estimate on Tuesday. Federal Reserve officials, Richard Clarida, John Williams, James Bullard and Charles Evans, speak on Thursday. The monthly US employment report is due on Friday.

These are movements in important markets:

stocks

Nikkei 225 futures fell 0.2% in Singapore. The S & P / ASX 200 index in Australia fell 0.1%. The Hong Kong Hang Seng Index fell 0.1% earlier. The S&P 500 index fell 0.7% on Friday.

Currencies

The yen rose 0.2% to $ 107.84. The offshore yuan was $ 6.9689. The euro was $ 1.1162.

tie up

The 10-year government bond yield fell nine basis points to 1.79% on Friday. 10-year Australian government bond yields fell about five basis points to 1.20%.

raw materials

West Texas Intermediate Crude Oil rose 3.1% to $ 63.05 a barrel. Gold rose 1.5% to $ 1,552.20 an ounce, the highest since September Friday.

Contact the reporter about this story: Andreea Papuc in Sydney at apapuc1@bloomberg.net

How to contact the editor responsible for this story: Christopher Anstey at canstey@bloomberg.net

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