(Bloomberg) – Stocks in Asia and US stock futures fell as investors weighed hot US inflation data and mixed comments from central bankers on the interest rate outlook.
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An Asian equity benchmark headed for its lowest close in more than a month as South Korea and Hong Kong stocks led regional declines. The Hang Seng China Enterprises Index slipped, dragging the gauge 10% below its January high.
Contracts for the S&P 500 retreated after the index showed little change on Tuesday. Nasdaq 100 futures also slipped after the gauge, which is more sensitive to higher interest rates, rose 0.7% on Tuesday. Euro Stoxx 50 futures pointed to a lower open.
The two-year Treasury yield remained near the highest level since November after adding 10 basis points on Tuesday. The 10-year Treasury benchmark was largely unchanged after falling four basis points in the previous session. Australian and New Zealand benchmark yields were broadly flat.
The moves were fueled by US CPI data showing prices rising more than forecast and subsequent comments from policymakers. The pound weakened on Wednesday after UK inflation fell more-than-expected in January while remaining in double digits and five times above the Bank of England’s target level.
Federal Reserve Bank of Philadelphia President Patrick Harker said the Fed is nearing the point where interest rates are tight enough. “From my perspective, we’re not done yet,” he said. “But we’re probably close.”
Harker’s Richmond Fed counterpart, Thomas Barkin, told Bloomberg TV that the central bank may “need to do more” to fight inflation, and Dallas Fed Chair Lorie Logan said rate hikes “will last longer than previously thought.” “ could last.
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“Inflation is still falling, but it’s not falling as fast as we’d hoped,” said Benjamin Kirby, co-head of investments at Thornburg Investment Management, in an interview with Bloomberg Television. “The overall narrative is pretty much intact,” he added. “The Fed is nearing its final rate.”
The dollar edged up against all of its Group-10 peers, while the yen stabilized after weakening over the previous two days. Oil fell for a second day after an industry estimate pointed to a sharp rise in US inventories and investors assessed the US monetary policy outlook. Gold slipped.
Turkish stocks rose sharply after returning from a week-long suspension after authorities threw their full weight behind investors to avoid a repeat of last week’s defeat.
Elsewhere, the People’s Bank of China added more cash to the financial system to meet a rebound in credit demand after the nation eased Covid restrictions.
Key Events:
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US Retail Sales Wednesday
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US jobless claims, Australian unemployment, Cleveland Fed Chairwoman Loretta Mester speaks at the Global Interdependence Center event on Thursday
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France CPI, Russia GDP Friday
Some of the key movements in the markets:
Shares
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S&P 500 futures were down 0.5% at 7:15 am London time
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Nasdaq 100 futures down 0.6%
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Futures on the Dow Jones Industrial Average fell 0.3%
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The MSCI Asia Pacific Index fell 1.3%
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The MSCI Emerging Markets Index fell 1.2%
currencies
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The Bloomberg Dollar Spot Index rose 0.3%
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The euro fell 0.2% to $1.0712
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The Japanese yen fell 0.1% to 133.32 per dollar
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The offshore yuan fell 0.2% to 6.8521 per dollar
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The British pound fell 0.6% to $1.2097
cryptocurrencies
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Bitcoin fell 0.5% to $22,146.27
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Ether fell 0.3% to $1,551.36
Bind
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The 10-year government bond yield was little changed at 3.74%.
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The 10-year German government bond yield rose seven basis points to 2.44%
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The 10-year UK government bond yield rose 12 basis points to 3.52%
raw materials
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Brent crude fell 1% to $84.72 a barrel
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Spot gold fell 0.6% to $1,842.57 an ounce
This story was created with the support of Bloomberg Automation.
–With the support of Tassia Sipahutar.
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