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GLOBAL MARKETS-Oil gains on Iraqi violence; bonds steady on safety bid
June 16, 2014 / 4:35 PM / 3 years ago

GLOBAL MARKETS-Oil gains on Iraqi violence; bonds steady on safety bid

* Global equity markets slip on Iraqi worries
    * Crude near 9-month highs on fears of Iraq impact
    * Bond prices rise on Iraq safety buying

 (Adds close of European bond, stock markets)
    By Herbert Lash
    NEW YORK, June 16 (Reuters) - Oil prices rose on Monday
after the Sunni insurgency in Iraq raised concerns over
potential disruption to crude supplies, while that violence and
renewed tensions in Ukraine drove buying of safe-haven
currencies and bonds.
    Fighting in Iraq and Ukraine damped global equity markets,
even though merger activity offset some declines on Wall Street,
where stocks traded near break-even.
    Investor unease hit the Nikkei early in the day as
Tokyo suffered its biggest fall in a month, while European
shares were in the red for the third time in four days.
    Russian natural gas exporter Gazprom reduced
supplies to Ukraine on Monday after Kiev failed to meet a
deadline to pay off its gas debts in a dispute that could
disrupt supplies to the rest of Europe. 
    "There was a reasonable flight-to-quality bid overnight with
the developments in Iraq and Gazprom, so global equities were
under a fair amount of pressure and that gave a bid to
longer-dated Treasuries," said Ian Lyngen, senior government
bond trader at CRT Capital in Stamford, Connecticut.
    MSCI's all-country world equity index edged
down 0.1 percent. The FTSEurofirst 300 index of top
European shares closed down 0.42 percent at 1,383.95.
    The Dow Jones industrial average fell 19.52 points,
or 0.12 percent, at 16,756.22. The Standard & Poor's 500 Index
 was down 0.75 points, or 0.04 percent, at 1,935.41. The
Nasdaq Composite Index was up 0.10 points, or 0.00
percent, at 4,310.75. 
    Brent crude for August delivery was up 48 cents at
$112.94 a barrel. U.S. oil was up 9 cents at $107.00 a
barrel.
    The yen and the Swiss franc rose, with the Japanese currency
hitting a four-month high against the euro as investors sought
safety.
    The dollar slipped as traders await clues from the U.S.
Federal Reserve on the timing of an interest rate increase amid
doubts about the economic recovery.
    The dollar fell 0.21 percent to 101.84 yen, while the
euro fell to a four-month low against the yen before paring much
of its decline. It was last at 138.19 yen in U.S.
trading.
    The dollar and euro were also weaker against the Swiss
franc, another safe-haven currency, trading at 0.8971 franc
 and 1.21770 francs respectively.
    U.S. Treasuries prices rose as Iraq and Ukraine increased
demand for safe-haven bonds, though solid U.S. economic data
limited gains.
    Benchmark 10-year notes were last up slightly to
yield 2.6024 percent.
    

 (Reporting by Herbert Lash; Additional reporting by Marc Jones
in London; Editing by Dan Grebler)

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