The dollar strengthened against the yen on Monday and oil prices rose as investors unwound safety trades after the failed coup in Turkey while SoftBank Group’s $ 32 billion deal to buy British chip designer ARM Holdings lifted European equities. Turkish shares .XU100 fell 3.5 percent on Monday but the lira TRYTOM=D3, which hit a three-week low against the dollar on Friday as news of the coup attempt broke, rose nearly 3 percent as authorities launched a purge of suspected plotters. Investors had initially bought safe-haven assets such as the yen, gold and U.S. Treasuries on reports of the coup but these trades were largely unwound on Monday. The yen JPY= fell 0.9 percent to 105.80 per dollar and the euro EUR= rose 0.2 percent to $ 1.1055. “The scenario looks a bit calmer now … so we’re back to thinking about the sort of policy outlook that had the yen falling against the dollar last week,” said Jeremy Stretch, head of currency strategy at CIBC in London. Gold XAU= fell 0.9 percent to about $ 1,326 per ounce, with prices pressured by the stronger dollar. Crude oil, which initially fell as the Turkish army said it had seized control in a country bordering Syria, Iraq and Iran, edged up on Monday. Brent crude LCOc1, the international benchmark, was 8 cents higher at $ 47.69 a barrel. “The market is looking past the coup,” said Ric Spooner, chief market analyst at Sydney’s CMC Markets. “There is no disruption to shipping. There is nothing in terms of short-term risk (to oil supply),” he said. Istanbul’s Bosphorus Strait, which handles about 3 percent of global oil shipments, reopened on Saturday after being shut for several hours on Friday. European shares opened higher, led by a surge of almost 45 percent in ARM Holdings. SoftBank (9984.T) will pay 17 pounds a share for ARM – a premium of more than 40 percent to Friday’s closing price. ARM (ARM.L) last traded at 1,708 pence, up 44 percent. Japanese shares were closed for a holiday. The pan-European STOXX 600 index was up 0.7 percent and the FTSEurofirst 300 .FTEU3 gained 0.6 percent. For Reuters new Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS added 0.3 percent, having reached its highest in almost nine months last week. Australia rose 0.5 percent. Chinese shares .SSEC fell, led lower by real estate and construction shares after data showed growth in house prices slowed last month. U.S. stock index futures ESc1 1YMc1 were up, indicating Wall Street would open higher after closing flat on Friday. Yields on U.S. Treasuries, which were also in demand on Friday as the Turkish coup bid unfolded, were down on the day but up from Friday’s closing levels. Ten-year yields US10YT=TWEB stood at 1.58 percent. German 10-year yields DE10YT=TWEB, the euro zone benchmark for borrowing costs, fell 1.7 basis points to minus 0.08 percent. MONETARY EASING Core government bond yields have been falling across the developed world, with many turning negative, in anticipation of monetary easing to help ignite weak growth and inflation. The European Central Bank meets this week and while no change is expected this time, further steps are seen likely in September. Investors also expect easier policy from the Bank of Japan and the Bank of England while markets price in little chance of any hike in Federal Reserve interest rates this year. (Additional reporting by Wayne Cole in Sydney, Keith Wallis in Singapore, Patrick Graham in London; Editing by Dale Hudson)
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