Reuters: Asian share markets retreated on Wednesday and the euro was pressured as doubts over the policies of US President Donald Trump and an election looming in France sapped investor confidence.

MSCI’s broadest index of Asia-Pacific shares outside Japan ticked down 0.3%, slipping further from Monday’s four-month high, led by 0.9% fall in South Korean shares.

Japan’s Nikkei slipped 0.2%.

“The markets are now paying attention to political risks in Europe and the United States, after a rally earlier this week following the strong US payrolls data,” said Kenta Tadaide, senior economist at Mizuho Research Institute.

On Wall Street, the S&P 500 ended barely higher while the Nasdaq edged to a record high as gains in big tech names countered energy declines.

With more than half of the S&P 500 having reported results, fourth-quarter earnings are on track to have climbed 8.2%, which would be the best performance since the third quarter of 2014, according to Thomson Reuters I/B/E/S.

A raft of strong global economic data and hopes that Trump’s talk of economic stimulus measures had helped to support world share markets, and the dollar, since late last year.

But the lack of detail on Trump’s stimulus plans and some other policy stances taken after he was sworn in on January 20 have unsettled investors.

Trump’s protectionist leanings on international trade and controversy over his move to temporarily ban the entry of immigrants from seven Muslim-majority countries have caused alarm.

“Corporate earnings have been pretty good so far. But without details of Trump’s economic policies, it is hard to become bullish,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

Uncertainty on the new administration’s currency policy is also keeping foreign exchange markets on edge.

The dollar has been steadily declining against the yen since Trump signalled displeasure with Japan’s currency stance on January 31.

The US currency traded at 112.35 yen JPY=, having fallen to 111.59 yen on Tuesday, its lowest since late November.

The pair may see limited moves for now as traders look to a meeting between Trump and Japanese Prime Minister Shinzo Abe on Friday.

The euro EUR=, on the other hand, shed 0.6% on Tuesday and last stood at $1.0682, hit by rising concerns that the far right could win France’s presidential vote and take the country out of the euro.

The gap between French and German 10-year borrowing costs widened to 78 basis points, the biggest level since late 2012.

Support for conservative challenger Francois Fillon, who was seen as a frontrunner a few weeks ago, has tumbled in the wake of a financial scandal, losing ground to independent centrist Emmanuel Macron and the anti-EU National Front leader Marine Le Pen.

While most investors expect Le Pen to be defeated in the run-off by a more moderate candidate, markets are nervous after last year’s experience of the Brexit referendum and Trump’s victory.

In addition, wrangling over Greece’s bailout are starting to haunt the market ahead of the euro group meeting on Feb. 20, with two-year Greek debt GR2YT=RR yield soaring to near 10% on Tuesday, compared to around six% just about two weeks ago.

Elsewhere, the Chinese yuan dipped slightly following Tuesday’s data that showed China’s foreign exchange reserves unexpectedly fell below the closely watched $3 trillion level in January for the first time in nearly six years.

Still, the market impact was limited as the fall in the reserves, of $12.3 billion to $2.998 trillion, was the smallest in seven months, indicating China’s renewed crackdown on outflows appears to be working, at least for now.

The yuan was little changed after dipping to one-week low of 6.847 per dollar in offshore trade CNH=D4 and three-week low of 6.8916 in the onshore trade CNY=CFXS.

“The fall was relatively small and had limited impact on the mainland markets. It is not like we have seen massive capital outflows,” said Naoki Tashiro, head of TS China Research.

Oil prices extended falls, as a massive increase in US fuel inventories and a slump in Chinese demand implied that global crude markets remain oversupplied despite OPEC-led efforts to cut output.

International Brent crude futures LCOc1 fell 0.9% to $54.55 per barrel. They were down 4.0% so far this week.

Gold near 3-month highs on political, economic uncertainty

Reuters: Gold on Wednesday held near three-month highs hit the session before, buoyed as political and economic uncertainty in the United States and Europe stoked safe-haven demand.

Spot gold had edged up 0.1% to $1,234.20 per ounce by 0307 GMT. On Tuesday, the metal touched its highest since Nov. 11 at $1,235.78.

US gold futures were mostly unchanged at $1,236.30 an ounce.

“The biggest momentum behind gold is the fact that the Fed did not raise rates in the recent meeting, some uncertainties brought by US President Donald Trump’s policies and a weaker dollar,” said Jiang Shu, chief analyst at Shandong Gold Group.

“Gold prices will continue to rise until mid-February on uncertainties in the US and Europe. But, once January CPI data is released, it will give an idea about the possibility of a rate hike in March,” Shu added.

Controversy over Trump’s temporary travel ban on people from seven Muslim-majority countries has recently boosted appetite for bullion as a safe-haven asset, while political uncertainty in Europe amid upcoming elections has buoyed the dollar.

Weaker output in manufacturing and construction drove the biggest monthly drop in German industrial production in nearly eight years in December, dashing prospects for robust growth in the final quarter of 2016.

The US trade deficit fell in December as exports hit their highest level in more than 1-1/2 years amid record shipments of technology products, but strengthening domestic demand points to further rises in imports, which could constrain economic growth.

Federal Reserve Chair Janet Yellen will present the US central bank’s semiannual report on monetary policy and the economy in testimony to the Senate Banking Committee on February 14, the panel said on Tuesday.

Gold is highly-sensitive to rising US rates, which increase the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced.

A bullish target at $1,249 per ounce has been temporarily aborted for spot gold and will only be resumed when the metal breaks above resistance at $1,237, according to Reuters technical analyst Wang Tao.

Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, climbed 1.01% to 826.95 tonnes on Tuesday from Monday. Holdings rose for a fifth straight session.

Spot silver slipped 0.1% to $17.69, after marking its highest since November 11 at $17.79 in the previous session.

Platinum rose 0.6% to $1,007.20, after touching its highest since November 9 at $1,015.20 the session before.

Palladium fell 0.1% to $759.78.