Asian stock index and U.S. stock futures fell on Wednesday as investors weighed the likely pace of further monetary tightening by the Federal Reserve and growing signs of an economic slowdown.
The broader regional stock market fell about 0.5%, led by falls in China and Hong Kong, where property developer Logan Group Co fell. is a sharp rise in share prices that once again underscores the real estate crisis dragging China’s economy.
The downturn fueled risk aversion, sending the S&P 500, Nasdaq 100 and European futures down. Risk-sensitive currencies such as those of Australia and New Zealand fell. The 10-year Treasury yield is holding above 3%. Bitcoin faltered.
The latest data showed a slowdown in economic activity from the US to Europe and Asia, underscoring the delicate task facing the Fed in raising interest rates to reduce high inflation without triggering a recession.
Investors will look to Fed Chairman Jerome Powell’s remarks at a symposium in Jackson Hole on Friday to gauge how hawkish the US central bank will be in the face of mounting economic challenges. The global rebound of shares from the June low has stopped ahead of the long-awaited event.
“Globally, we haven’t seen this kind of synchronized slowdown in decades,” Frances Stacey, chief strategy officer at Optimal Capital Advisors LLC, said on Bloomberg Television. “I don’t want to be directed” in choosing deals, she added.
Federal Reserve Bank of Minneapolis President Neil Kashkari said inflation is very high and the central bank must act to bring it under control.
The Fed is likely to use this weekend to re-emphasize the fact that there is more room for rate hikes because they really want to reduce inflation,” said Kelvin Tay, Asia Pacific chief investment officer at UBS Global Wealth Management. , on Bloomberg Television. .
Elsewhere, crude oil rose above $93 a barrel, helping draw down US crude inventories and a possible OPEC+ production cut.
What to watch this week:
- US Durable Goods MBA Mortgage Applications Pending Home Sales Wednesday
- US GDP, initial jobless claims, Thursday
- The Kansas City Fed is holding its annual economic policy symposium in Jackson Hole, Wyoming, on Thursday
- ECB July minutes, Thursday
- Fed Chairman Powell speaks in Jackson Hole on Friday
- US Personal Income, PCE Deflator, University of Michigan Consumer Sentiment, Friday
Some of the major movements in the markets are:
- S&P 500 futures were down 0.3% as of 5:50 a.m. in London. S&P 500 down 0.2%
- Nasdaq 100 futures fell 0.3%. The Nasdaq 100 was little changed
- Japan’s Topix index fell 0.1%
- Australia’s S&P/ASX 200 rose 0.5%
- South Korea’s Kospi rose 0.4%
- Hong Kong’s Hang Seng index fell 1.3%
- China’s Shanghai Composite fell 1.4%
- Euro Stoxx 50 futures down 0.3%
- Bloomberg Dollar Spot index rose 0.1%
- The euro fell by 0.1% to $0.9957
- The Japanese yen traded at 136.40 per dollar, up 0.3%
- The offshore yuan was at 6.8717 per dollar, down 0.3%
- The 10-year Treasury yield fell one basis point to 3.03%
- Australia’s 10-year bond yield rose four basis points to 3.62%
- West Texas Intermediate crude was at $93.49 a barrel, down 0.3%
- Gold cost $1,747.38 per ounce
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