MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.1 percent, to be down 5 percent over the past two weeks.
Asian shares slipped for a seventh straight session on Thursday as a mixed batch of US economic data did nothing to assuage concerns about global growth and deflation, keeping sovereign bonds well supported. Activity was sparse with Japan still on holiday and many investors taking cover ahead of the US jobs report on Friday.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.1 percent, to be down 5 percent over the past two weeks. "I think what has taken place more than anything else over the past 48 hours is the questioning of the reflation trade that was starting to be latched on by many, especially when you consider the recent price action in the USD, commodities and equities," CitiFX analysts said in a note.
"If that reflation trade notion is in fact dying, the unwind of the past few weeks of price action would potentially be the more significant reaction in markets." One shift already under way was a revival in demand for sovereign bonds, a favored hedge against deflation. Yields on 10-year US Treasury notes were at their lowest in two weeks at 1.777 percent, a notable rally from last week's top of 1.94 percent.
The equivalent yield in Australia has plunged no less than 31 basis points in the past week as record-low core inflation forced the central bank to cut its cash rate to an all-time low. The rush to bonds has left equities out in the cold.
The Dow ended Wednesday down 0.56 percent, while the S&P 500 eased 0.59 percent and the Nasdaq 0.79 percent. The pan-regional FTSEurofirst 300 index fell 1.2 percent to its lowest close in nearly four weeks.
"If that reflation trade notion is in fact dying, the unwind of the past few weeks of price action would potentially be the more significant reaction in markets." One shift already under way was a revival in demand for sovereign bonds, a favored hedge against deflation. Yields on 10-year US Treasury notes were at their lowest in two weeks at 1.777 percent, a notable rally from last week's top of 1.94 percent.
The equivalent yield in Australia has plunged no less than 31 basis points in the past week as record-low core inflation forced the central bank to cut its cash rate to an all-time low. The rush to bonds has left equities out in the cold.
The Dow ended Wednesday down 0.56 percent, while the S&P 500 eased 0.59 percent and the Nasdaq 0.79 percent. The pan-regional FTSEurofirst 300 index fell 1.2 percent to its lowest close in nearly four weeks.
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