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(Bloomberg) -- The Swiss franc was near a record high versus the euro after the central bank’s unexpected scrapping of its currency cap roiled markets, spurring a flight to haven assets. The yen held gains with gold as 10-year Australian bond yields slid below the benchmark rate for the first time since 2012.
The franc traded at 1.00149 per euro by 7:38 a.m. in Tokyo, after soaring as much as 41 percent yesterday in one of the biggest moves among major currencies since the collapse of the Bretton Woods system in 1971. The yen was near a one-month high, while gold was steady at $1,262.15 an ounce after posting its steepest one-day gain of 2015. Yields on Australian government debt fell to a record 2.49 percent after bonds from the U.S. to Europe soared. Asian index futures dropped as U.S. bank stocks slid on earnings and crude oil resumed its retreat.
The Swiss National Bank sparked mayhem in trading floors across Europe after its surprise move, which abolished a minimum exchange rate against the euro designed to shield the economy from the region’s sovereign-debt crisis. The euro area reports final December inflation figures today, amid speculation policy makers will boost stimulus. Citigroup Inc. and Bank of America Corp. joined JPMorgan Chase & Co. in posting the worst combined quarterly trading revenue since 2011.
“Many traders would have been caught out by the move and we are probably in for a period of re-adjustment in currency markets,” Stan Shamu, a markets strategist in Melbourne at IG Ltd., wrote in an e-mail to clients. “The timing is very interesting though, considering the European Central Bank is expected to announce quantitative easing as early as next week. This implies the SNB has indirectly told markets that QE is on the way.”
The euro was little changed at $1.1625 today after sliding 1.3 percent versus the greenback last session.
Future contracts on Japan’s Nikkei 225 Stock Average climbed 0.2 percent to 16,800 on the Chicago Mercantile Exchange, after contracts traded in Osaka slipped 1.8 percent to 16,850 by 3 a.m. local time. Futures on indexes in Sydney, Seoul and Hong Kong dropped at least 0.2 percent in most recent trading, with the S&P 500 losing 0.9 percent in the U.S. to cap a five-day slide of 3.4 percent.
New Zealand’s NZX 50 Index, the first major equity gauge to open each day in the Asian region, was little changed after falling 0.1 percent from a record on Thursday.
--With assistance from Jeremy Herron in New York.
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