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The powers of the National Assembly will be assumed by the Emir and the country's cabinet, state TV reported
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Asian shares rise on ECB hopes despite uncertainty
TOKYO - Shares rose on Tuesday as investors held on to hopes the European Central Bank can trim borrowing costs and help restore confidence in the euro bloc, even as officials denied a report about the shape of its planned bond buying strategy.
But most other assets - from the euro to oil and gold - drifted in recent ranges due to uncertainty surrounding major events that will take place after policymakers return from summer holidays. An ECB policy meeting is scheduled on Sept. 6 and euro zone finance ministers will meet in mid-September.
Leaders of Germany, France, the Eurogroup and Greece are meeting bilaterally this week, with a German-Greek dialogue set for Friday over Greece’s rescue plans. Global lenders will visit Greece early next month to finalise their assessment of Athens’ austerity reforms.
MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.6 percent, inching closer to a three-month high hit earlier this month, while Japan’s Nikkei stock average inched up 0.1 percent after rising to a three-month high on Monday.
European markets were also seen making small gains, with financial spreadbetters calling London’s FTSE 100, Paris’s CAC-40 and Frankfurt’s DAX to open up 0.1-0.2 percent.
“The current eerie calmness reflects that markets are in a transition from having reacted negatively to what’s been decided in the past and waiting for the next event trigger to decide which direction to go,” said Yuuki Sakurai, CEO of Fukoku Capital Management.
“While the situation in Europe hasn’t changed dramatically, we haven’t recently had news as severely bad as in the past,” he said. “It’s not a ‘risk-off’ mode but not a ‘risk-on’ mode. Markets are seeing yellow lights flashing but not yet turning red.”
For Sakurai, Germany’s strong commitment to support the euro bloc is more crucial for calming markets than measures taken by the ECB, so he said any moves or comments from Germany would be closely monitored.
Calm before the storm?
US stocks were flat on Monday, pausing after a recent rally, but the Standard & Poor’s 500 index hovered near a four-year peak. Europe’s top shares fell, but Spanish sovereign bonds rallied and lowered their yields further from critically high levels.
The ECB said on Monday it was misleading to talk about decisions not yet taken, denying a weekend report that said the bank was considering setting interest rate targets for any buying of bonds of struggling euro zone countries so that it would buy such bonds if their interest rates exceeded a certain premium over German bonds.
The Bundesbank also kept its opposition to the ECB buying euro zone sovereign bonds, even after German Chancellor Angela Merkel voiced support for the ECB’s crisis-fighting strategy last week.
“Strictly limited and highly conditional support by the ECB is unlikely to provide an early resolution of the financial stress that confronts ‘peripheral’ European sovereigns,” Barclays Capital said in a research note.
“For now, however, investors seem to be adopting a hopeful rather than sceptical stance,” it said.
The dollar traded down 0.2 percent at around 79.27 yen, retreating from a five-week high against the yen at 79.66 yen hit on Monday. The euro inched up 0.1 percent to $1.2359 .
Lacklustre elsewhere
With the rise in equities markets, Asian credit markets firmed, tightening the spread on the iTraxx Asia ex-Japan investment-grade index by 2 basis points.
Oil inched up, with Brent up 0.2 percent at $113.95 a barrel while U.S. crude futures edged up nearly 20 cents to around $96.15 a barrel.
Copper rose 0.1 percent to $7,468 a tonne and spot gold also inched higher to around $1,622.30 an ounce.
The Australian dollar firmed to around $1.0481 from around $1.0450 after the Reserve Bank of Australia’s August policy meeting minutes did not offer fresh hints of more easing.
“In a broader sense, investors continue to respond favourably to coordinated global central bank intervention, part of which is the ability to successfully jawbone markets into the belief that whatever they have up their sleeves, central bankers will trump all,” said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co.
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