Pound and yuan slide while European stocks mixed

Sydney - The dollar strengthened and the pound extended its decline from Friday, while the offshore yuan had its biggest two-day drop since June.

European shares were mixed and US equity futures pointed higher following gains in most Asian markets.
The Dollar Index edged higher after US jobs data for December bolstered the case for the Federal Reserve to raise borrowing costs this year.

The yuan extended its decline following the biggest loss in a year, while the worst performing major currency was the won, which dropped the most in two months. UK shares continued to climb, while German and broader European equities fell.

Hong Kong stocks traded near a one-month high and Singapore equities rallied to the highest since November 2015. Markets in Japan were closed for a holiday.

Britain’s Prime Minister Theresa May said Sunday that negotiations on Brexit will be about "getting the right relationship, not about keeping bits of membership."

The odds the US central bank will tighten at its March meeting rose to about 35% on Friday, from 31% the day before, as labour data stoked optimism that growth in the world’s largest economy is set to accelerate.
Oil fell for the first time in four sessions and gold rose.

Currencies

The Dollar Index rebounded from an earlier loss and was up 0.2% and the pound slid 0.8% to $1.21847.  The offshore yuan was down 0.4% following Friday’s 0.9% retreat.

The central bank set the onshore yuan reference rate 0.9% weaker against the dollar, though still stronger than some bank models predicted.   

The yen fell 0.2% to 117.28 per dollar and the won slid 1.3%, the most in two months. The Australian dollar rose 0.1%, the only major currency gainer against the greenback.

Stocks

The Stoxx Europe 600 Index futures lost 0.3% in a second day of losses, while UK’s FTSE 100 rose for a 10th day in the longest rally since May 2013.

The Shanghai Composite Index rose 0.5% to its highest close in a month.

Hong Kong’s Hang Seng Index added 0.3%, while Singapore’s Straits Times Index climbed as much as 0.7%.

South Korea’s Kospi Index was little changed and the Jakarta Composite was down 0.6%.

The MSCI Asia Pacific excluding Japan Index edged higher after changing direction at least five times.  The S&P 500 futures added 0.1%.

The underlying gauge rose 0.4% to a record close of 2 276.98 on Friday in New York. It added 1.7% in the week, the most since December 9.

Bonds

Australian bonds sold off, with yields following the US higher. The 10-year Aussie rate added 8 basis points to 2.76%, while the comparable New Zealand yield rose 7 basis points to 3.27%.

The US 10-year rate rose 8 basis points to 2.42% on Friday, while futures were little changed.

Commodities

West Texas Intermediate crude oil dropped 0.5% to $53.70, halting its advance below $54 a barrel as an increase in US drilling offset signs Opec members are sticking to planned output cuts.

Gold rose 0.4% to $1 176.7 an ounce.