Asian Equities Slide after Swiss Franc Move

U.S. index futures slipped with Asian stocks as Switzerland unexpectedly scrapping its currency cap damped demand for riskier assets and as oil headed for its longest run of weekly losses since 1986. The Swiss franc was near a record high versus the euro as Australian bonds surged.

Standard & Poor’s 500 Index futures slid 0.7 percent by 10 a.m. in Tokyo, following a five-day drop of more than 3 percent in the U.S. equity benchmark. Japanese shares drove the MSCI Asia Pacific Index (MXAP) down 0.6 percent with U.S. oil at $46.33 a barrel, poised for an eighth weekly decline. The franc was at 99.06 centimes per euro, after soaring as much as 41 percent Thursday in Zurich. Yields (GACGB10) on 10-year Australian debt slid below the nation’s key interest rate for the first time since 2012.

The Swiss National Bank sparked mayhem on trading floors after the surprise move, which abolished an exchange rate limit against the euro designed to shield the economy from the region’s sovereign-debt crisis. A New Zealand currency brokerage said it would close due to losses sustained from the franc’s surge. The euro area reports final December consumer prices figures today, after the SNB stoked speculation stimulus will be boosted at next week’s European Central Bank meeting.

Bloomberg

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