Asia stocks dealt fresh blow as China exports sink

Asia stocks dealt fresh blow as China exports sink

Chinese stocks fell the most in almost five months after the nation's biggest brokerage issued a rare sell rating on the People's Insurance Company (Group) of China, likely signalling the government's desire to slow a market that has outperformed global rivals over the past two months. This was the biggest drop in three years and far worse than analysts had expected. The bank indicated it would keep interest rates at historic lows at least until next year and potentially indefinitely and set out a new program to offer cheap loans to euro zone banks.

While the market widely expected a downward revision in growth from the ECB, the central bank had perhaps taken the extent a notch further than expected.

Yet the cocktail of growth woes and dovish central banks proved a boon for bonds.

The dollar weakened 0.2% after reaching a new 2019 high against a basket of currencies that includes the euro as traders bet the U.S. would fare better than Europe in the coming months despite some soft patches in the USA economy.

USA 10-year Treasury yields hit a fresh two week low 2.627%.

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Gold prices moved higher on Friday, with investors seeking the safe haven asset, after equities tumbled on disappointing economic data out of the US and China and on lingering uncertainty about U.S.

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With the Federal Reserve's monetary pivot already priced in, some investors are wondering if the dollar's recent gains could become more sustained. Nonfarm payrolls may have increased by 180,000, while the jobless rate fell to 3.9%, according to estimates.

"Lower interest rate expectations in Europe mean a likely rise in the US dollar".

The U.S. dollar lost strength and the dollar index dropped to a low of 97.25.

"The ECB's updated forecasts imply that, at best, growth slowly returns to trend over the next few years, meaning it will be very hard to get underlying inflation up", wrote analysts at ANZ in a note. "That is not good news for euro area banks or the euro".

Oil futures fell around $1 with USA crude at $55.75 a barrel, while Brent crude fell to $65.14.

In commodity markets, oil prices eased as USA crude output and exports climbed to record highs, undermining efforts by producer club OPEC to tighten global markets.

United States crude was last down 38 U.S. cents at $56.28 a barrel, while Brent crude fell 49c to $65.81.