Stocks in Asia are set to ease lower in June after a month marked by intense volatility as fears of aggressive monetary tightening to fight inflation. The Treasury yield and the dollar jumped.
Futures fell in Japan, Australia and Hong Kong. US contracts edged higher in early Asia trade, after the S&P 500 retreated, ending May almost flat. The Nasdaq 100 also pulled back, falling for the fourth month in five.
sugar stock Listed in the US posted its first monthly profit since October following the easing of the lockdown, which is expected to boost economic activity.
Traders bet on a hike in Federal Reserve interest rates, allowing the Treasury to extend the decline, raising 10-year yields by nearly 10 basis points. The swap shows that traders almost exclusively hiked two half-point rates in June and July, with a third such hike also likely in September. Adding to inflation concerns, crude oil rose nearly 10% in May and rose in Asia on Wednesday.
Concerns that a hike in central bank rates could trigger a recession have investors speculating about the outlook for the economy as rising food and energy costs squeeze consumers. Euro-zone consumer prices jumped 8.1% in May from a year earlier to a record.
LPL Financial strategists Jeff Buchbinder and Ryan Detrick wrote, “This is at a time when investors need a crystal ball. We fully acknowledge how hard it is to see a bull case for stocks, and recently A retest of the lows is certainly possible, but this week we present the bull case for the second half of the year. It starts with inflation.”
President Joe Biden used a rare meeting with Federal Reserve Chairman Jerome Powell to announce he was respecting the independence of the central bank—as well as controlling decades-high inflation—before mid-November. Responsibility is transferred to. The meeting took place on Friday ahead of US payroll numbers.
How will the Fed’s quantitative tightening affect the markets? QT officially begins on Wednesday and is the subject of this week’s MLIV Pulse survey. Click here to participate anonymously.
Here are some major events to watch this week:
- The Federal Reserve is set to begin shrinking its $8.9 trillion balance sheet on Wednesday
- The Fed released its Beige Book report on regional economic conditions on Wednesday
- New York Fed President John Williams, St. Louis Fed President James Bullard speak at separate events on Wednesday
- OPEC+ Virtual Meeting Wednesday
- Cleveland Fed Chair Loretta Meester Discusses the Economic Outlook on Thursday
- US May Employment Report Friday
- The Food and Agriculture Organization of the United Nations releases its monthly food price index on Friday at a time of peak concern about global supply
Some of the main moves in the markets:
shares
- S&P 500 futures rose 0.1% as of 7:05 am in Tokyo. S&P 500 fell 0.6%
- Nasdaq 100 futures rose 0.2%. Nasdaq 100 fell 0.3%
- Nikkei 225 futures fell 0.2%
- Australia’s S&P/ASX 200 Index futures fell 0.4%
- Hang Seng Index futures down 1.2%
currencies
- Bloomberg Dollar Spot Index up 0.4%
- Japanese was at 128.66 per dollar
- Offshore Yuan 6.6792 per dollar. was on
- Euro $1.0734 . was on
bond
- Yield on 10-year Treasury rose 11 basis points to 2.84%
Goods
- West Texas Intermediate crude rose 0.6% to $115.32 a barrel
- Gold was at $1,837.27 an ounce.
This story has been published without modification in text from a wire agency feed. Only the title has been changed.