Asian stock markets steadied somewhat on Tuesday after heavy losses over the past 24 hours, while the US dollar held higher as investors weighed prospects that interest rates in several developed economies would remain on hold for a longer period.
MSCI’s broadest index of Asia-Pacific shares outside Japan jumped slightly 0.4% after US shares ended the previous session with lighter losses. The index is up 0.8% so far this month.
Australia’s S&P/ASX200 rose 0.13% and Japan’s Nikkei stock index rose 0.26%.
Hong Kong’s Hang Seng index opened up 0.68% and China’s Bluechip CSI300 index up 0.3% in early trade.
The Reserve Bank of Australia (RBA) is expected to expand its monetary tightening campaign when it meets later in the day.
The central bank is likely to raise the official cash rate by 25 basis points to 3.35%, according to economists polled by Reuters. The decision will be announced at 0330 GMT.
“Sentiment in the markets is dominated by central banks and re-evaluation of rates,” Kerry Craig, global market strategist at JP Morgan Asset Management, told Reuters.
“There has been a strong run in equities since the start of the year, so it is not a big surprise to see an air pocket emerge now.
“It’s been a quiet week for economic data globally and while this is the case, uncertainty over interest rates is the dominant theme among investors.”
In the Asian trading session, the yield on benchmark 10-year Treasury notes rose to 3.6268%, compared with Monday’s US close of 3.632%.
The two-year yield, which rises with traders’ expectations of higher Fed funds rates, rose to 4.4368%, compared with the US close of 4.456%.
The reappraisal of higher rates began after strong US jobs growth in January saw employment increase by 517,000, more than double what economists expected. The unemployment rate hit 3.4%, the lowest it has been in more than 53 years.
Investors will be closely watching Federal Reserve Chairman Jerome Powell’s speech at the Economic Club of Washington later on Tuesday.
Overnight on Wall Street, the Dow Jones Industrial Average fell 0.1%, the S&P 500 fell 0.61% and the Nasdaq Composite fell 1%.
ANZ economists wrote, “The market has reassessed to expect the fed funds rate to reach above 5% and now expects only a very limited rate cut, only 25 basis points by the end of this year.” is one of.”
“It is very clear that sentiment is fragile and data dependent, and this new defensive posture may play out in the near term as risk appetite eases.”
The dollar declined 0.04% to 132.6 against the yen after touching a three-week high of 132.9 during the US trading session.
The European single currency was up 0.1% on the day at $1.0736, having fallen 1.16% in a month.
The dollar index, which tracks the greenback against a basket of major trading partner currencies, was down marginally at 103.47 from its US trading levels. However, it remains above its recent low of 101.55 on February 3.
US crude rose 0.9% to $74.78 a barrel. Brent crude rose to $81.69 per barrel.
Gold was a bit high. Spot gold was trading at $1871.65 an ounce.
The text of this story is published from a wire agency feed without any modification.
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