Investors seek safety in bonds, yen after Turkey downs Russian jet

(From Reuters)

Investors sought safety in low-risk government debt on Tuesday after Turkish jets shot down a Russian warplane near the Syrian border, while European tourism-linked stocks fell after a U.S. travel warning due to “increased terrorist threats”.

Traders are pictured at their desks in front of the DAX board at the stock exchange in Frankfurt, Germany, November 23, 2015. REUTERS/Staff/Remote

Traders are pictured at their desks in front of the DAX board at the stock exchange in Frankfurt, Germany, November 23, 2015. REUTERS/Staff/Remote

It was the first time a NATO member’s armed forces had shot down a Russian or Soviet military aircraft since the 1950s. Russia said its plane had been downed over Syria.

The dollar fell against the traditionally safe-haven Japanese yen and Swiss franc, helping push oil and metals prices higher.

Wall Street looked set to follow European shares lower ESc1 1YMc1, according to index futures.

Yields on 10-year U.S. Treasuries US10YT=RR hit a three-week low at 2.21 percent and two-year German yields DE2YT=TWEB dipped below -0.4 percent for the first time.

Turkish shares .XU100 fell 1.4 percent and the lira TRYTOM=D3 lost 1 percent against the dollar. Russian stocks .IRTS and the rouble RUB= also fell.

The prospect of escalating tension between the former Cold War foes gave an additional push lower to German yields. Two-year debt last yielded -0.39 percent, having earlier hit a record low of -0.401 percent. Ten-year Bund yields DE10YT=TWEB fell 3.5 bps to 0.5 percent.

Brent crude LCOc1 rose 53 cents to $45.36 a barrel, also lifted by Saudi Arabia’s pledge on Monday to work towards a stabilization of oil prices.

The pan-European FTSEurofirst 300 index .FTEU3 fell 1.3 percent. The early damage was down by a 10 percent fall in Zodiac Aerospace (ZODC.PA) after the company reported a 44.6 percent fall in annual earnings. Read more



Categories: Asia Unhedged, Middle East

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