Equity markets in Asia were poised for a cautious open after US stocks halted a four-day winning streak amid a selloff in banks.
(Bloomberg) — Equity markets in Asia were poised for a cautious open after US stocks halted a four-day winning streak amid a selloff in banks.
Futures for stock markets in Australia and Japan declined, while those for Hong Kong gained. Contracts for US benchmarks edged higher as they opened in Asia trading Wednesday after the S&P 500 Index dropped 0.6% a day earlier.
Banks came under renewed pressure, with a gauge of financial heavyweights in the US falling the most in almost two weeks. In a wide-ranging annual letter to shareholders, JPMorgan Chase & Co.’s chief Jamie Dimon warned the US banking crisis that sent markets careening last month will be felt for years.
Treasuries rose, with the two-year yield, the more sensitive to changes in monetary policy, declining as much as 14 basis points as data showing a drop in job openings bolstered bets the Federal Reserve is about to wrap up its tightening campaign.
“Investors should continue to be vigilant for signs of bank stress, and we expect market participants to react disproportionately to negative economic news,” said Gennadiy Goldberg, senior US rates strategist at TD Securities.
Related stories:
- BofA Clients Sold the Most US Stocks Since October Last Week
- JPMorgan’s Kolanovic Warns Stocks in ‘Calm Before the Storm’
Swap contracts downgraded the odds of a quarter-point rate hike at the Fed’s May meeting to about 50% from closer to 60%.
Vacancies at US employers sank in February to the lowest since May 2021, the Labor Department’s Job Openings and Labor Turnover Survey showed Tuesday. The reading was below all estimates in a Bloomberg survey.
Asian currencies were little changed in early trading Wednesday. Against a broadly weaker dollar Tuesday, the yen and kiwi gained, while the Aussie fell after the Reserve Bank of Australia kept rates on hold.
RBA Governor Philip Lowe is scheduled to speak Wednesday, after saying in yesterday’s statement that the RBA expects “some further tightening of monetary policy may well be needed.” The wording, however, suggested a toning down of the tightening bias.
The Reserve Bank of New Zealand will be center stage Wednesday. Policymakers are expected to raise rates by 25 basis points to 5%, down from a 50-point increase in February after a jumbo 75-point hike at the end of last year. A further deceleration may indicate the bank no longer expects to reach a peak of 5.5%.
Elsewhere, oil in New York settled above $80 a barrel, paring gains on disappointing labor data. Bitcoin trended toward the high end of its recent range of around $28,000, while Dogecoin continued to benefit from Elon Musk’s flirtation with the meme token.
Key events this week:
- Eurozone S&P Global Eurozone Services PMI, Wednesday
- US ADP employment change, Wednesday
- US trade, Wednesday
- US initial jobless claims, Thursday
- St. Louis Fed President James Bullard speaks, Thursday
- US unemployment, nonfarm payrolls, Friday
- Good Friday. US stock markets closed, bond markets close for part of the day
Some of the main moves in markets:
Stocks
- S&P 500 futures rose 0.1% as of 7:10 a.m. Tokyo time. The S&P 500 fell 0.6%
- Nasdaq 100 futures was little changed. The Nasdaq 100 fell 0.4%
- Nikkei 225 futures fell 0.6%
- Australia’s S&P/ASX 200 Index futures fell 0.2%
- Hang Seng Index futures rose 0.6%
Currencies
- The euro was little changed at $1.0956
- The yen was little changed at 131.68 per dollar
- The offshore yuan was little changed at 6.8790 per dollar
Cryptocurrencies
- Bitcoin was little changed at $28,256
- Ether fell 0.3% to $1,873.45
Bonds
- The yield on 10-year Treasuries declined seven basis points to 3.34% Tuesday
- Australia’s 10-year yield declined six basis points to 3.26%
Commodities
- West Texas Intermediate crude rose 0.1% to $80.80 a barrel
- Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Rita Nazareth.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.