Shares in Asia fell alongside US equity futures after stocks closed little changed on Wall Street and a gauge of volatility slid to the lowest level in more than a year.
(Bloomberg) — Shares in Asia fell alongside US equity futures after stocks closed little changed on Wall Street and a gauge of volatility slid to the lowest level in more than a year.
Shares in Australia and Japan opened in the red while share futures for Hong Kong’s Hang Seng Index rose slightly. The cautious mood in the US pushed the CBOE VIX index of volatility to the lowest since 2021. A Bank of America global measure of volatility spanning stocks, rates, currencies and commodities sits at the lowest level since early 2022.
The yield on the policy-sensitive two-year Treasury was steady in Asia after rising five basis points to the highest level in a month. The Federal Reserve said in its monthly Beige Book survey that the US economy was “little changed” but had begun to show signs of slowing. Fed Bank of New York President John Williams said the recent trend of slowing inflation continues but that price gains remain too high. Trader bets continue to lean toward a rate hike next month.
New Zealand’s 10-year yield fell along with the currency after inflation data came in softer than anticipated. Australia’s 10-year yield was flat.
First-quarter US earnings were mixed. Tesla Inc. missed profit expectations while International Business Machines Corp. and Morgan Stanley beat forecasts.
“A recession doesn’t necessarily mean companies have to lose money,” Erin Gibbs, chief investment officer for Main Street Asset Management, said in an interview with Bloomberg Television. “Companies that have very strong free cash flows that don’t have to go to the banks and get new loans are the ones that tend to do well.”
In Asia, Taiwan Semiconductor Manufacturing Co. earnings will be in focus. Analysts expect the chip giant to post weak results and will focus on full-year revenue guidance.
Bank of Japan officials are reportedly wary of tweaking or scrapping the yield curve control program when the central bank meets next week following the banking issues in the US and Europe. The yen was steady while ten-year government bond yields edged down.
Banks in China are set to keep the loan prime rates on hold, after the People’s Bank of China stayed put, according to analysts. An independent review of Australia’s central bank recommended setting up an expert policy board and fewer meetings followed by press conferences.
Elsewhere in markets, the dollar was steady after rising Wednesday. Bitcoin dropped below $30,000. Oil fell while gold declined below $2,000 an ounce.
Key events this week:
- China loan prime rates, Thursday
- Eurozone consumer confidence, Thursday
- US initial jobless claims, existing home sales, index of leading economic indicators, Thursday
- ECB issues report on March policy meeting, Thursday
- Fed’s Christopher Waller speaks at cryptocurrency-focused event, Thursday
- Fed’s Patrick Harker speaks on “monetary policy and housing”, Thursday
- Fed’s Loretta Mester discusses the economic and policy outlook, Thursday
- Fed’s Raphael Bostic discusses regional and national economic conditions, Thursday
- Fed’s Michelle Bowman and Lorie Logan speak at event, Thursday
- PMIs for Eurozone, Friday
- Japan CPI, Friday
- Fed’s Lisa Cook discusses economic research at an event, Friday
Some of the main moves in the market:
Stocks
- S&P 500 futures fell 0.3% as of 9:11 a.m. Tokyo time. The S&P 500 was little changed
- Nasdaq 100 futures fell 0.4%. The Nasdaq 100 was little changed
- Hang Seng futures rose 0.4%
- Japan’s Topix fell 0.5%
- Australia’s S&P/ASX 200 fell 0.1%
Currencies
- The Bloomberg Dollar Spot Index was unchanged
- The euro was little changed at $1.0956
- The Japanese yen was little changed at 134.64 per dollar
- The offshore yuan was little changed at 6.8910 per dollar
Cryptocurrencies
- Bitcoin fell 1.6% to $28,771.78
- Ether fell 2.4% to $1,932.89
Bonds
- The yield on 10-year Treasuries was unchanged at 3.59%
- Japan’s 10-year yield declined 0.5 basis point to 0.465%
- Australia’s 10-year yield declined one basis point to 3.50%
Commodities
- West Texas Intermediate crude fell 0.3% to $78.89 a barrel
- Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.
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