Global equities stabilized on Friday as the dollar headed for its longest winning run since 2014 on a strong U.S. economy, with investors expecting central banks to hold rates steady for two weeks.

Apple’s (AAPL.O) market worth fell $200 billion in two days due to allegations of China restricting iPhone usage by state personnel, while supplier shares fell on Friday due to protectionist worries.
As the yuan sank to its worst level since 2007, copper and crude oil prices fell as the dollar weakened and China’s faltering economy worried demand.

“People think the U.S. economy is better than anyone else and don’t think interest rates will rise again,” said CMC Markets chief market analyst Mike Hewson.

“The European Central Bank, Federal Reserve, and Bank of England meetings in the next two weeks are everything. Hewson predicted they would all sit on their hands.

However, hawkish ECB officials pushed money markets to bet more on a rate rise next week, pushing eurozone government bond rates higher.

After dropping for a week, the MSCI All Country stock index (.MIWD00000PUS) stabilized at 677.56 points, down 1.5% for the week but up over 12% for the year.

The 600-company STOXX index (.STOXX) rose 0.2% in Europe but was down 0.7% for the week.
S&P 500 futures remained unchanged.

Baird vice chair of equities Patrick Spencer said markets were guessing how fast the Fed may decrease rates next year.

Spencer added, “Maybe you are going to see slightly higher for longer rates and they may not come down as quickly next year, which will slow consumption and consumer confidence.”

YUAN LOW 16 YEARS

Dollar advances have driven the Chinese yuan to a 16-year low and spurred Japanese authorities to raise their rhetoric after the yen fell.

“Given China’s challenges and signs of a re-tightening of the U.S. jobs market, it is not surprising that the dollar is finding support, allowing the ‘dollar juggernaut’ to continue its rampaging run,” ANZ Bank analysts said.

MSCI’s broadest Asia-Pacific share index outside Japan (.MIAPJ0000PUS) remained unchanged but down over 1% for the week. Storms stopped Hong Kong markets this morning. Japan’s Nikkei lost 1.1%.

An Apple supplier, TSMC (2330. TW), fell 0.5%. South Korea’s SK Hynix (000660. KS), whose processors are in Huawei’s new phone, slumped 4%. Tokyo Electron (8035.T) fell 4%.

“China’s partial ban on Apple products revived trade wars and U.S.-China decoupling,” stated Kyle Rodda of Capital.com. “The ban is narrow, but it showed the two-way costs and risks of decoupling.”

Tech companies were already under pressure from increasing U.S. yields on wagers that interest rates would stay at 20-year highs, pushing the dollar.

The euro fell 0.5% last week and held stable at $1.07110.

The yen has hit 10-month lows and is near 150, where speculators expect government assistance.

Japan’s top currency ambassador, Masato Kanda, said Wednesday that authorities would not rule out clamping down on “speculative” movements. In contrast, chief cabinet secretary Hirokazu Matsuno said the government is monitoring with “urgency”.

Benchmark The 10-year U.S. Treasury yield was 4.2383%, and the two-year yield was 4.9443%.

Brent oil prices are higher this week, but weakening European and Chinese demand indications have offset gains on strong U.S. data.

Brent fell 0.16% to $89.79.