Asian Market: Shares in Asia fell on Wednesday on fresh concerns about a gloomy economic outlook as monetary policy tightened in much of the world to fight high inflation.
Shares fell in Japan, Australia and South Korea. US futures held steady after the S&P 500 sank and the tech-heavy Nasdaq 100 lost more than 3%. Monthly and quarterly institutional portfolio rebalancing can affect trading.
The dollar edged higher after rising the most in more than a week in a Wall Street session amid declining US consumer confidence. Treasuries were steady, leaving the 10-year yield at 3.18%.
risk of one american recession China’s surprise move on Tuesday to reduce quarantine times for incoming travelers was overseen. The move had lifted the markets in hopes of doing away with the strategy of stamping out Covid that would come with huge economic costs through repeated lockdowns.
Oil went past $112 a barrel due to supply risk. Among cryptocurrencies, bitcoin walloped around $20,000 amid generally poor sentiment.
Investors are skeptical that the Federal Reserve may avoid a severe economic downturn amid a sharp hike in interest rates to ease price pressure.
“The Fed still believes it can thread a very fine line between tightening financial conditions while not hurting the economy too much,” Emily Weiss, a macro strategist at State Street Corp., told Bloomberg TV. “We’re still not sure if they’re going to be able to pull this off. That’s what we’ve seen reflected in the markets over the past month or so.”
He said in China, there was a recent relief rally to ease the quarantine for incoming travelers, but the COVID-zero policy is still well established, which will likely hinder regular reopenings.
US officials sought to play down the risk of a recession. New York Fed President John Williams and San Francisco’s Mary Daly both acknowledged they had to pacify inflation, but insisted a softer landing was still possible.
In Europe, central bank president Christine Lagarde confirmed plans for an initial quarter-point rate hike in July, but said policymakers are ready to take action if necessary to tackle record inflation.
What to watch this week:
- US GDP, Wednesday
- ECB President Christine Lagarde, Federal Reserve Chair Jerome Powell, BOE Governor Andrew Bailey and Cleveland Fed Chair Loretta Meester are due to speak at an ECB event on Wednesday
- St. Louis Fed President James Bullard Speaks, Wednesday
- China PMI, Thursday
- US Personal Income, PCE Deflator, Initial Jobless Claims, Thursday
- Eurozone CPI, Friday
- US construction spending, ISM Manufacturing, Friday
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Some of the main moves in the markets:
shares
- S&P 500 futures were up 0.1% at 9:29 am in Tokyo. S&P 500 fell 2%
- Nasdaq 100 futures rose 0.1%. Nasdaq 100 dropped 3.1%
- Japan’s Topix index fell 0.5%
- Australia’s S&P/ASX 200 index drops 1%
- South Korea’s Kospi index dropped 1.4%
- Hang Seng Index futures fell 1.1% earlier
currencies
- The Bloomberg Dollar Spot Index was stable
- The euro was up 0.1% at $1.0530
- The Japanese yen was at 136.06 per dollar
- The offshore yuan was at 6.7031 per dollar
bond
- The yield on the 10-year Treasury was 3.17%
- Australia’s 10-year bond yield rose five basis points to 3.78%
Goods
- West Texas Intermediate crude rose 0.6% to $112.41 a barrel
- Gold was at $1,819.61 an ounce.
This story has been published without modification in text from a wire agency feed. Only the title has been changed.