(Bloomberg) — Asian stocks are poised for a fall on Thursday after US stocks and bonds sold off after hawkish remarks in the minutes of the last Federal Reserve meeting.
Bloomberg’s most read articles
Japan, Australia and Hong Kong benchmark stock futures all fell. On Wednesday, the S&P 500 dropped 0.8%, the Nasdaq 100 dropped 1.1%, and giants Meta Platforms, Amazon.com and Tesla fell more than 1.5%. US futures were little changed in early Asian trading.
10-year Treasury yields hit their highest intraday high since October, while policy-sensitive 2-year yields edged closer to 5%. The sell-off wiped out this year’s gains in the U.S. government debt index.
The move came after the minutes of the Fed’s July meeting fueled fears that the Fed would continue to raise rates to curb inflation.
“The Fed has no choice but to continue with policy until it is confident that inflation expectations have dissipated,” Steve Sosnick, chief strategist at Interactive Brokers, said after the minutes were released. “Otherwise, we risk rekindling some of the embers. In July, two governors favored keeping rates on hold, but it’s important to keep in mind that a moratorium is not the pivotal axis. is.”
The Bloomberg Dollar Index rose to a two-month high and the pound rallied after better-than-expected UK inflation data.
Australian and New Zealand bond yields rose in early Thursday trading. The upcoming Australian jobs report is expected to show a slowdown in new hiring and an increase in the unemployment rate.
The yen has fallen to 2023 lows, trading at levels prior to triggering Japan’s intervention in September, while the offshore yuan fell on the back of financial and economic concerns.
One of China’s largest shadow banks has skipped payments on some investment products, sparking rare protests in Beijing. The firm offers high-yield trust products related to the domestic distressed real estate market. Tencent Holdings Inc’s sales were disappointed by warnings to the domestic tech industry, and a unit of China’s Evergrande Group said China’s securities regulator had filed a case against the company for alleged disclosure violations. .
The concerns came after the People’s Bank of China (PBOC) set a higher-than-expected benchmark for the yuan, injecting the largest amount of short-term funds into the financial system since February, in a move to boost weak sentiment. It arose. So far, the measures have failed to restore optimism, with the U.S. Treasury Department warning of implications for the global economy.
Still, the market has yet to fully reflect the risks from China’s deteriorating fundamentals, said Tiffany Wilding, an economist and managing director at Pacific Investment Management.
“Given the usual delays, it is likely that deflationary spillovers are just beginning to affect global consumer markets,” Wilding wrote in a client note. “Discounting is likely to accelerate in the coming quarters.”
Company Highlights:
-
London-listed BAE Systems is in talks to buy Ball’s aerospace unit, according to people familiar with the matter.
-
A $5.4 billion deal between Intel and Israel’s Tower Semiconductor has collapsed after failing to receive Chinese regulatory approval on time.
-
Energy Transfer LP will acquire Crestwood Equity Partners LP in a $7.1 billion all-stock transaction, enabling Energy Transfer to expand its U.S. pipeline network.
-
Target rose after an unexpected profit surge in the second quarter overshadowed the company’s increasingly cautious outlook for the rest of the year.
Main events of the week
The main movements in the market are:
stock
-
As of 8:08 a.m. Tokyo time, S&P 500 futures were little changed. S&P 500 down 0.8%
-
Nasdaq 100 futures were little changed.Nasdaq 100 down 1.1%
-
Nikkei 225 futures down 0.3%
-
Hang Seng futures fell 1.3%.
-
S&P/ASX 200 Futures Down 0.3%
currency
-
Bloomberg Dollar Spot Index Little Change
-
The euro was little changed at $1.0878.
-
The Japanese yen is almost unchanged at 1 dollar = 146.31 yen.
-
The offshore yuan was little changed at 7.3369 yuan to the dollar.
Cryptocurrency
-
Bitcoin dropped 0.3% to $28,840.2.
-
Ether barely changed at $1,809
bond
merchandise
-
West Texas Intermediate crude fell 0.3% to $79.18 a barrel.
-
Gold spot rose 0.1% to $1,894.14 an ounce.
This article was produced in partnership with Bloomberg Automation.
Bloomberg Businessweek’s Most Read Articles
©2023 Bloomberg LP
