Asian stocks fell on Monday and bond yields ticked higher, as red-hot US inflation raised concerns about an even more aggressive Federal Reserve policy tightening, and a COVID-19 warning from Beijing dented global growth. Added concerns about
Chinese blue chips shed 0.84% and Hong Kong’s Hang Seng lost 2.9%. Japan’s Nikkei fell 2.78% and South Korea’s Kospi fell 2.78%. New Zealand’s stock benchmark was down 2.1%. Australian markets remained closed for the holiday. US stock futures After retreating Friday’s 2.91%, it pointed to further losses at the reopening, signaling the S&P 500’s 1.54% lower.
The dollar hit 135 yen for the first time in two decades, buoyed by continued Treasury yield growth in Tokyo trading, with a 10-year peak of 3.201% in more than a month, giving it only two-tenths of a second. keeps. One basis point from the highest since November 2018.
Beijing’s most populous district, Chaoyang, on Sunday announced three rounds of mass testing to prevent “brutal” covid-19 outbreak Which emerged last week into a bar in a nightlife and shopping area, shortly after the city eased from April to ease an outbreak and concerns of more growth-strangling lockdowns.
Meanwhile, the US consumer price index rose 8.6% more than expected last month, the biggest year-on-year increase since December 1981, Labor Department data showed Friday.
It dashed expectations that inflation was peaking, and instead alerted markets that the Fed could tighten policy for too long and lead to a sharp economic slowdown. The next policy decision will come on Wednesday.
“Inflation figures are a game changer forcing the Fed to tighten a high-geared, front-loading policy,” Jefferies strategist Anita Markowska wrote in a research note, adding 75 basis points to this week’s decision. Taking a call for
“Inflation is not peaking, it is not stable either. It is still accelerating and is likely to happen in June as well,” the note said. The market is currently priced at 80% odds of a half point increase and 20% odds of 75 basis points.
Two-year Treasury yields, which are very sensitive to policy expectations, jumped 3.159% in Tokyo on Monday, the first time since December 2007. The US dollar index, which measures the currency against six major peers, including the yen, marked a high of 104.55 for the first time in nearly a month.
The euro fell as low as $1.0479 for the first time since May 19. Leading cryptocurrency bitcoin fell to a one-month low of $25,975.
Meanwhile, crude oil fell over $2 on global growth concerns. Brent crude futures fell $2.06, or 1.7%, to $119.95 a barrel, while US West Texas Intermediate crude was down $118.54 a barrel, down $2.13, or 1.8%.
This story has been published without modification in text from a wire agency feed. Only the title has been changed.