Tom Westbrook

SYDNEY, (Reuters) – Stock markets fell on Thursday. Safe havens like government bonds, gold, and the yen were supported by Asia as a hint at concern about the future outlook for growth and interest rates, especially outside the United States.

Concern about oversupply and potential China, Japan, and America dipping into fuel reserves led to oil prices falling to their lowest level in six weeks. Futures were last at $79.77 last week, more than 8 percent off the three-year peak. [O/R]

Risk-sensitive Australian dollars also dropped to $0.7256 after a six week trough. [AUD/]

Early trade saw a 0.6% drop in prices ()After overnight index contractions, the broadest MSCI index of Asian shares fell 0.5% to remain flat. [.N]

Hong Kong was the most calm, where worries about earnings prospects weighed heavily on tech stocks. Heavyweights also saw a 5% decline. Alibaba The NYSE: dragged about 1% below. ()

Jun Bei Liu from Tribeca Investment Partners, Sydney said “We seem to have stalled somewhat”

In the aftermath of strong U.S. results seasons, she suggested that “investors may be just taking a little pause” as they face macroeconomic headwinds such as rising inflation and slowing China.

While the dollar had recently been sensitive to the yen as a safe-haven, the yen saw the sharpest jump in one day against it on Wednesday. Meanwhile, gold increased almost 1% while Treasuries rose along the curve. [US/]

On Thursday, gold rose 0.1% further to $1869 per ounce in Asia. In Asia, the yen rose to $13,869 an ounce on Thursday. [GOL/]

Tokyo’s benchmark 10-year Treasury yields held steady at 1.5889%, after dropping about 5.5 basis point overnight.

The rest of the day is quite quiet, but there are some highlights, including appearances by central bankers from Australia and the United States, as well as U.S. data on jobless claims.

BIG DOLLAR

A surging U.S. Dollar is seen against the background of caution, with U.S. data turning surprisingly strong despite doubts about the outlook for major economies.

Figures from Wednesday showed an increase in building permits. The backlog for housebuilding rose to a record 15-year-high. These figures were triggered by Tuesday’s stronger-than-expected retail sale report.

Europe, however, is struggling with the fourth wave COVID-19 cases. New restrictions are being put in place to stop it. The central bank continues to resist increasing rates.

While the euro is now recovering from its Wednesday plunge below $1.13, the currency remains uncertain at $1.1325. It will be facing the worst month since June 2016, when the Federal Reserve surprised investors by changing their tone to be more hawkish. [FRX/]

A sharp decline in the Aussie/yen exchange is being viewed by currency traders, who often use it as a gauge of market sentiment. The cross fell below its 200-day moving mean on Tuesday, and it has fallen by almost 4% over a dozen sessions.

Matt Simpson, senior analyst with brokerage City Index said that “you’ve got the perfect storm for bears.” Lower oil prices make the Aussie/yen look pretty solid, both technically and conceptually.