Oil, gold and yen up on Yemen tensions

26-Mar (Financial Times) — Gold and the yen are in demand following a sharp drop on Wall Street overnight and as oil prices spike in response to increased military action in Yemen.

After a mostly soft session for Asia-based bourses, the FTSE Eurofirst 300 in Europe is stumbling 1.3 per cent, while US index futures suggest the S&P 500 will dip 12 points to 2,049 when New York’s starting bell rings.

The sour tone across global equities stems primarily from Wall Street’s heavy losses on Wednesday, when the S&P 500 tumbled 31 points, the technology and biotech-heavy Nasdaq Composite lost 2.4 per cent — its biggest daily drop in nearly a year — and the CBOE’s Vix index, a volatility measure, jumped 13 per cent.

…The buck’s trade-weighted index, which two weeks ago hit a 12-year high of 100.39, is down 0.5 per cent on the day at 96.46.

Contributing to the greenback’s retreat is strength in the “haven” yen. The Japanese unit is 0.6 per cent firmer at Y118.75, a move that reflects the market’s traditional reaction at times of anxiety.

Gold is another beneficiary of this angst, the bullion adding $12 to $1,207 an ounce, its most expensive in three weeks.

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