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(Bloomberg) – Stocks in Asia are expected to open stably on Wednesday as investors worry about interest rate hikes that have caused US stocks to fall to a record low and prolong a decline in Treasuries.
Futures rose in Japan, changed little in Australia, and plunged in Hong Kong. The Nasdaq 100 underperformed amid a massive sell off of tech stocks. The S&P 500 has changed little.
The U.S. Treasuries rout worsened for a second day amid growing belief that the Federal Reserve will hike rates at least three times starting in May to counter price pressures. Yields on long maturities climbed amid a large supply of new corporate bonds after a year-end lull. The dollar was little changed, while the yen hit its lowest level since January 2017.
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Chinese stocks will be watched closely after having experienced their worst start to the year since 2019. An index of New York-listed companies with their business primarily in China fell the most in more than two weeks.
December payroll data in the US and minutes from the Fed’s meeting last month may shed more light this week on the potential pace of rate hikes. Minneapolis Fed Chairman Neel Kashkari has said he supports two rate hikes this year to counter the risks posed by inflation.
“Wall Street knows the first quarter of the year will be devoted to accelerating Fed rate hike expectations as investors assess the impact of high energy prices, surging Treasury yields and the endless attention to new variants of Covid, “Edward Moya, senior market analyst in Oanda, said in a note
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Tuesday’s data showed mixed signs on US inflation. Prices paid by manufacturers in December were significantly lower than expected. However, figures showing a record rate of job resignations in the United States added to concerns about wage inflation.
Crude oil in New York won. OPEC and its allies have agreed to revive more interrupted production as the outlook for global oil markets improves, with demand largely resisting the new variant of the coronavirus.
Elsewhere, Bitcoin has traded above $ 46,000. Goldman Sachs Group Inc. predicts that $ 100,000 is possible as the cryptocurrency continues to take market share from gold as a store of value.
What to watch this week:
FOMC meeting minutes due for release on Wednesday Fed Bullard discusses US economy and monetary policy at event Thursday Fed’s Daly discusses monetary policy at panel Friday ECB schnabel speaks on Saturday during a panel
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For more market analysis, read our MLIV blog.
Some of the main movements in the markets:
Actions
The S&P 500 was little changed The Nasdaq 100 fell 1.4% Nikkei 225 futures were up 0.2% Australia’s S & P / ASX 200 index futures fell 0 , 3%
Currencies
Japanese Yen fell 0.7% to 116.14 per dollar Offshore Yuan was 6.3750 per dollar Bloomberg Dollar Spot Index was little changed Euro was at $ 1.1282
Obligations
The yield on 10-year treasury bills rose two basis points to 1.65%
Merchandise
West Texas Intermediate crude rose 1.4% to $ 77.12 per barrel Gold rose 0.7% to $ 1,814.30 per ounce
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Bloomberg.com
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