Stocks in Asia are set to come under pressure on Wednesday as fears of an economic slowdown tighten their grip on financial markets, a sinking oil and a rally in the dollar and treasuries.
Futures pointed to a decline for exchanges in Japan, Australia and Hong Kong. US contracts fluctuate after Wall Street’s volatile session shares With high but low confidence that global stocks are close to surviving a bear market.
about prevailing concerns recession Oil fell below $100 a barrel amid a campaign of monetary tightening to fight high inflation. Crude was just above that level in early Asian trade. Copper has hit a 19-month low.
Haven’s demand supported treasuries and pushed the dollar gauge to a more than two-year high. There is growing talk of the greenback being equal to the euro.
Slivers of comfort such as the possible rowing back of some US tariffs on Chinese goods are proving no match for the gloomy mood in the markets. An impending energy crisis in Europe amid Russia’s war in Ukraine and threats to the company’s earnings as the US economy slows are among the risks facing investors.
“Markets are caught between two opposing forces and this is where we are going to be in the next few months,” said Diana Amoa, chief investment officer for long-biased strategies at Kirkoswald Asset Management on Bloomberg television. The trade of low growth for the trade of high inflation.”
According to the latest forecast from Bloomberg Economics, the probability of a US recession in the next year is now 38%. Bond traders are now planning a policy change by the Federal Reserve in the coming year, with the current flurry giving way to interest rate cuts in mid-2023.
Elsewhere, the turmoil in British politics caused the pound to suffer. Boris Johnson’s premiership is on the verge after the resignations of two of the most senior cabinet members, but he is taking a dig as UK prime minister.
In China, Shanghai began large-scale testing for Covid in nine districts after detecting cases in the past two days, raising concerns that the financial center may once again find itself locked in a search for a Covid zero. .
This story has been published without modification in text from a wire agency feed. Only the title has been changed.