Asian markets rise as cautious investors return
Asian markets react to modest rise in US stock futures. But trading expected to be seasonally thin in Asian markets.
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Markets also remain vulnerable to declines as debt cutting plans in Europe and the United States threaten to act as a further drag on already weak economic growth at a time when latest data has been patchy.Skip to next paragraph
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U.S. consumer sentiment plunged to its lowest level since 1980 in early August, data showed on Friday, though July retail sales rose 0.5 percent.
Still, signs that equities might have marked a temporary bottom after last week's volatile moves and persistent chatter that Swiss authorities may peg the franc against the euro to battle its surge sent the safe-haven currency tumbling by two percent against the euro and the dollar.
The euro, which plumbed a record low around 1.0075 francs last week, climbed to a high of 1.1294 francs in morning trade, up from 1.1079 late in New York on Friday.
But Barclays Capital analysts warned expectations of a peg seemed overdone, believing the franc would rally once again this week if markets started to change their view on its probability.
"We remain CHF bears in the medium run - we agree with the SNB's view that it is "massively overvalued" - but, this week, we are not expecting the recent appreciation of EUR/CHF to hold," said Paul Robinson, strategist at Barclays Capital.
The drop in the franc rippled over into gold markets with the precious metal slipping after a 1.5 percent slide in the previous session. Before Friday's slide, gold had gained 9 percent so far this month.
U.S. crude futures were steady around $85.50 a barrel after settling down slightly on Friday.
Trading activity is expected to be thin with Korea and India out and Japan's summer "obon" holidays this week.
Gold fell more than 1 percent in early trade before paring most of its losses. By late morning it was at $1,744 an ounce, little changed from late Friday U.S. levels.