* Brent crude sinks over $2 a barrel on groundbreaking Iran
* Iran deal seen positive for risk appetite, global growth
* Yen remains under pressure, euro makes four-year highs
By Wayne Cole
SYDNEY, Nov 25 Oil prices fell sharply on Monday
after Iran and six world powers sealed a deal curbing its
nuclear programme, a fillip for global economic growth and risk
appetites that should benefit share markets.
The agreement, reached late Sunday, gives Iran some relief
from crippling sanctions. While it will not be allowed to
increase its oil sales for six months, any easing of Middle East
tensions tends to lead to lower crude prices.
Brent crude oil shed $2.29 to $108.69 a barrel, its
biggest daily drop in a month. U.S. oil dived $1.09 to
$93.75 a barrel.
Attention in Asia will again be on Japanese markets as a
weak yen promises to boost exports and profits. While the Nikkei
ran into profit-taking on Friday it still ended the week
up 1.4 percent, and has gained almost 10 percent in as many
On Wall Street, the Dow Jones industrial average
ended Friday with gains of 0.34 percent, while the S&P 500
added 0.5 percent for its first ever close above 1,800.
MSCI's all-country world equity index rose
But with money flooding into developed world assets,
emerging markets are getting cold shouldered. It was notable
that MSCI's broadest index of Asia-Pacific shares outside Japan
failed to make any headway at all last week,
even as Wall Street made new peaks.
Early Monday, the index was up 0.2 percent, as Australian
shares led the way with an increase of 0.7 percent.
In currency markets, the yen remained under pressure as
investors use it for carry trades -- borrowing the currency at
super-low rates to invest in higher-yielding assets elsewhere.
The dollar was up at 101.27 yen and just off a
four-month peak. Dealers said most of the action was in the euro
against the yen, which has had a barnstorming run to reach
four-year highs above 137 yen.
Euro-yen bulls now have their eyes set on a series of peaks
from 2009 ranging from 137.43 all the way to 139.18, the top for
that year. A break of the latter would take the euro to
territory not visited since October 2008 and would be considered
very bullish from a technical view.
Oddly, the gains have come even as the European Central Bank
sounds ever more dovish on policy.
Over the weekend ECB Executive Board members Benoit Coeure
and Joerg Asmussen both said the central bank was ready to take
further action if necessary and instruments at its disposal
included negative deposit rates.
The single currency has been particularly strong against the
Australian dollar, which was undone by threats of intervention
from the Reserve Bank of Australia.
The euro leaped almost four full cents last week as the
Australian currency crumpled to a three-month trough.
Traders said the commodity currency could continue to
struggle particularly if tensions between China and Japan grew.
China at the weekend suddenly imposed new rules on airspace
over islands at the heart of a territorial dispute with Tokyo,
prompting Japan and ally the United States to warn of an
escalation into the "unexpected".
There is no major economic data due in Asia on Monday, while
most of the U.S. economic releases will be front-loaded this
week ahead of the Thanksgiving holiday on Thursday.
The U.S. diary includes figures on housing starts and
prices, consumer confidence, durable goods orders and
manufacturing in the Chicago area.