World markets up as Turkish lira improves and due to good German data

“The more significant emerging-market concern relates to the risk that regional under-performance becomes a source of disruption through swings in capital flows and currencies,” said Matt Sherwood, head of investment strategy at Perpetual. “While the focus at present is on Turkey, where currency depreciation and rising rates has translated into a marked tightening of financial conditions, it could spread to Mexico, Brazil and India.”

Sherwood cited the North American Free Trade Agreement (Nafta) negotiations as a key risk for Mexico and upcoming elections in Brazil and India as potential threats for those two markets.

Gold loses its lustre

Bond yields in Spain and Italy fell, although the euro was still struggling at $1.1407, having touched its lowest since July 2017 on Monday. It also reached one-year lows against the yen and Swiss franc, safe harbours in times of stress.

The dollar was a touch firmer at ¥110.95, having hit a six-week trough at about ¥110.10 on Monday. Against a basket of currencies, the dollar rose to 96.289 in European trading.

In commodity markets, gold slid to its lowest since late January 2017. It was at $1,1195 an ounce. US government data last week showed that gold speculators had lifted their bearish bets to a record.

Holdings of the largest gold-backed exchange-traded fund, New York’s SPDR Gold Trust GLD, have dropped about 10% from their April peak and are at their lowest since February 2016.

Oil prices rose after a report from oil cartel Opec confirmed that top exporter Saudi Arabia had cut production to avert looming oversupply. Brent gained 60c to $73.22 a barrel. US crude added 64c to $67.85.

Reuters