Asian Stocks Set to Fall as Risk Appetite Retreats: Markets Wrap




  • In Business
  • 2022-09-27 23:01:59Z
  • By Bloomberg

(Bloomberg) -- Asian stocks are poised to decline following a drop for US shares after hawkish comments from Federal Reserve officials and another blow to risk sentiment from tensions in Europe.

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Equity futures for Japan, Hong Kong, Australia fell after the S&P 500 capped its worst run since early 2020. European equities slid to the lowest level in nearly two years.

The Bloomberg dollar index set a fresh record as investors seek havens amid fears of global recession. The yield on the US 10-year Treasury note touched the highest level since early 2010 as it approached 4%.

Demand for the dollar also reflects unease as markets brace for higher interest rates. Federal Reserve officials reiterated their determination to tame inflation, with James Bullard underscoring the need for tighter monetary policy.

Read More: Stock Bear Market Will Get Whole Lot Worse When Credit Cracks

"The Fed knows that inflation is a genie that's hard to get back in the bottle and they want to make sure that they take care of the problem at hand," said Louise Goudy, partner at Crewe Advisors. "It is an unsettled market."

Leaks to a gas pipeline between Russia and Western Europe were labeled as sabotage by US and German officials, ratcheting up friction with Vladimir Putin's regime. Russia threatened to cut off gas to Ukraine's allies in Europe and annexed a large chunk of Ukraine in the latest signs of escalating conflict.

European gas prices rose while worries about slowing global growth weighed on other raw materials, sending a Bloomberg index of commodity prices to the lowest level since February. West Texas Intermediate crude fell in early Asian trading and remained below $80 per barrel.

UK markets were again in turmoil days after the new prime minister unveiled sweeping tax cuts that threaten to add to inflationary pressures. The 30-year UK government bond yield topped 5% for the first time in two decades.

How much damage is a strong dollar causing? That's the theme of this week's MLIV Pulse survey. It's brief and we don't collect your name or any contact information. Please click here to share your views.

Key events this week:

  • Fed's Mary Daly, Raphael Bostic, Charles Evans and ECB President Christine Lagarde speak at events, Wednesday

  • Euro zone economic confidence, consumer confidence, Germany CPI, Thursday

  • US initial jobless claims, GDP, Thursday

  • Fed's Loretta Mester, Mary Daly speak at events, Thursday

  • China PMI, Friday

  • Euro zone CPI, unemployment, Friday

  • US consumer income , University of Michigan consumer sentiment, Friday

  • Fed's Lael Brainard and John Williams speak, Friday

Some of the main moves in markets:

Stocks

  • S&P 500 futures rose 0.1% as of 7:50 a.m. in Tokyo. The S&P 500 fell 0.2%

  • Nasdaq 100 futures gained 0.2%. The Nasdaq 100 advanced 0.2 %

  • Nikkei 225 futures fell 0.7%

  • Australia's S&P/ASX 200 Index futures dropped 0.5%

  • Hang Seng Index futures fell 1.2%

Currencies

  • The Bloomberg Dollar Spot Index was little changed

  • The euro traded at $0.9590

  • The British pound fell 0.2% to $1.0717

  • The offshore yuan was at 7.1814 to the dollar

  • The Japanese yen was little changed at 144.81 per dollar

Cryptocurrencies

  • Bitcoin traded flat at $19,079

  • Ether rose 0.2% to $1,327

Bonds

  • The yield on 10-year Treasuries advanced two basis points to 3.95%

  • Australia's 10-year yield rose seven basis points to 4.09%

Commodities

  • West Texas Intermediate crude fell 0.2% to $78.38 a barrel

  • Gold rose 0.1% to $1,630.06 an ounce

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©2022 Bloomberg L.P.

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