Asian markets will open on Thursday against the backdrop of a rally in Treasuries triggered by economic concerns after Federal Reserve Chairman Jerome Powell acknowledged the risk of a recession.
Equity futures signals were weak in Japan, Australia and Hong Kong. S&P 500 and Nasdaq 100 contracts slipped in early Asian trade.
US stock But the losses were probably contained on the comfort pieces that the Fed’s interest rate hiking would be shorter due to the dangers of cycle growth.
Low-maturity led the climb in Treasuries, with two-year yields retreating closer to 3%. One gauge of the dollar declined. In commodity markets, crude fell below $105 a barrel, broken on fears about the demand outlook.
Powell said the US has to bring high inflation back to the 2% target. He acknowledged the sharp rate hike could lead to an economic contraction and called the soft landing “very challenging” in Senate testimony on Wednesday.
The prospects of the Fed’s rate hiking cycle going forward from the November policy meeting have turned sharply lower as traders continue to price the hard-landing and prospects of a sharp policy reversal next year.
“They have acknowledged that rates will continue to rise, but the FOMC committee is aware to watch the data coming in, the Fed will not be particularly tight on autopilot,” said Joe Gilbert, portfolio manager at Integrity Asset Management.
Chinese shares traded in the US rose for two days. Investors are assessing steps to support China’s economy and easing tech sector action. In Hong Kong, incoming leader John Lee is working on a strategy to reopen city borders, according to a report.
However, the major focus for the markets remains the impact of a wave of global price pressures and monetary tightening across a range of economies.
“Ever since we hit the S&P highs in January, there has been little conviction,” Eli McCartney, managing director of UBS Private Wealth Management, said on Bloomberg television. Inflation is real, it has been more frequent and global than one might expect. or expected.”
Elsewhere, bitcoin fell below $20,000 amid a general mood of caution.
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What to watch this week:
- Powell US House Testimony, Thursday
- America’s initial jobless claims, Thursday
- Eurozone, France, Germany, UK, Australia, Thursday. PMI for
- ECB Economic Bulletin, Thursday
- US University of Michigan Consumer Sentiment, Friday
- RBA’s Lowe speaks on panel, Friday
Some of the main moves in the markets:
shares
- S&P 500 futures were down 0.1% as of 7:20 am in Tokyo. S&P 500 fell 0.1%
- Nasdaq 100 futures fell 0.3%, Nasdaq 100 fell 0.2%
- Nikkei 225 futures rose 0.2%
- Australia’s S&P/ASX 200 Index futures rise 0.4%
- Hang Seng Index futures up 0.8%
currencies
- Bloomberg Dollar Spot Index down 0.2%
- Euro $1.0567 . was on
- The Japanese yen rose 0.1% to 136.14 per dollar
- The offshore yuan was at 6.7118 per dollar
bond
- Yield on 10-year Treasuries fell 12 basis points to 3.16%
Goods
- West Texas Intermediate crude fell 1.9% to $104.22 a barrel
- Gold was at $1,837.76 an ounce.
This story has been published without modification in text from a wire agency feed. Only the title has been changed.