In Asian Equity Markets most indices searched for direction on Monday, with Malaysian stocks recovering after falling at the open as markets reopened after an election. The FTSE Bursa Malaysia KLCI traded flat, recovering after recording declines of more than 2 percent earlier as investors digested last week’s surprise election victory by an opposition alliance. The Nikkei 225 firmed to trade 0.19 percent higher and the broader Topix edged up by 0.24 percent. The real estate subindex advanced 2.74 percent in morning trade, while precision machinery and mining stocks traded lower. The Kospi erased early gains to slip 0.15 percent, with heavyweight Samsung Electronics declining 2.34 percent.

In Currency Markets the US dollar’s recent rally ran out of steam on Monday with U.S. yields sinking as investors wound back expectations that the U.S. Federal Reserve will launch a series of rapid rate hikes this year. The dollar index against a basket of six major currencies was down 0.15 percent at 92.402. The index hit a 4-1/2-month high of 93.416 last Wednesday, as a rise in U.S. Treasury yields highlighted the wide interest rate gap between the United States and other countries. However, it drifted lower after soft April U.S. consumer price data lowered the likelihood of the Fed raising rates as many as four times in 2018 as had been expected.

In Commodities Markets crude prices fell in a see-saw session on Friday, retreating after early gains as it looked likely that U.S. allies would push to maintain a deal with Iran, which could keep that country’s crude exports on global markets. In another sign global supplies could rise further, data in the afternoon showed U.S. crude producers added 10 rigs in the latest week. Crude prices remained just below multi-year highs, with Brent on track for a weekly 2.8 percent gain and U.S. crude a 1.2 percent weekly rise. Brent crude settled down 35 cents at $77.12 a barrel, just below the $78-level hit on Thursday, its highest since November 2014.

In US Equity Markets the S&P 500 rose on Friday, helped by healthcare stocks after President Donald Trump blasted high drug prices but avoided taking aggressive measures to cut them. Johnson & Johnson and Pfizer each rose over 1 percent while Merck & Co jumped 2.8 percent after Trump in a speech said foreign governments “extort” unreasonably low prices from U.S. drug-makers. The S&P healthcare index ended 1.47 percent higher, while the Nasdaq Biotechnology index rallied 2.68 percent. The S&P 500 gained 0.17 percent to 2,727.72, its highest close since mid-March. The Nasdaq Composite ended flat. For the week, the S&P 500 added 2.4 percent, and the Nasdaq climbed 2.7 percent.

 
In Bond Markets the Treasury yield curve was the flattest it had been since July 2007 on Friday as shorter-dated yields rose on expectations the Federal Reserve would hike U.S. interest rates in spite of weaker-than-expected economic data this week. The spread between two- and 10-year note yields bottomed out at 41.0 basis points, the lowest since September 2007. The 10-year yield on Friday rose to a session high of 2.995 percent, still below the 3 percent level it broke above on Wednesday. The two-year yield hit a weekly high of 2.543 percent on both Thursday and Friday.