Asian shares fell with US stock futures as traders weighed earnings from Wall Street and as Chinese equities were hit by shareholders’ plans to trim their stakes.
(Bloomberg) — Asian shares fell with US stock futures as traders weighed earnings from Wall Street and as Chinese equities were hit by shareholders’ plans to trim their stakes.
MSCI Inc.’s Asia Pacific Index declined 0.4%, while the Hang Seng China Enterprises Index slid as much as 1.5% before paring losses. Futures on the S&P 500, along with those on the Nasdaq 100 and Euro Stoxx 50 all declined.
Treasury two-year yields, which are more sensitive to imminent policy moves than longer maturities, were little changed at 4.20%, while the yield on 10-year bonds held at 3.58%. The dollar traded in a narrow range.
Traders will be monitoring inflation data from the euro area that will determine European Central Bank’s monetary policy path going forward. UK inflation beat estimates in March as prices rose by 10.1% on a yearly basis.
ECB Chief Economist Philip Lane said Tuesday another increase in interest rates would be appropriate in May, but a more detailed picture of inflation would be needed.
“Two more hikes from here, getting to 3.5%, that will get the ECB to a stance that we think would be close to where it needs to be given the current circumstances,” Wouter Sturkenboom, chief investment strategist for EMEA & Asia Pacific at Northern Trust Asset Management, said on Bloomberg Television.
ASML Holding NV, a critical cog in the global semiconductor industry, reported net sales for the first quarter that beat estimates and forecast better-than-expected second-quarter sales amid strong demand for its chip-making machines despite a broader slump in the semiconductor industry.
Bank of Atlanta President Raphael Bostic told CNBC he favors raising interest rates one more time and then holding them above 5% for some time to curb inflation. His St. Louis counterpart James Bullard told Reuters he favors getting rates into a 5.5%-to-5.75% range. The benchmark currently sits between 4.75% and 5%.
Swaps are pricing in a quarter-point hike by the Fed in May, with rate cuts starting to take place in July.
“That might be too early,” Jonathan Liang, head of investment specialists for Asia ex-Japan at JPMorgan Asset Management, said on Bloomberg Television. “There could be a pivot, maybe towards the end of this year, but not maybe as soon as what the market is currently pricing.”
Despite the hawkish comments by the Fed officials, the Cboe Volatility Index stayed at the lowest since January 2022, remaining below 17. Bank of America’s GFSI Market Risk Index — a gauge of global volatility across assets — held near the lowest since February 2022.
Japan’s Sumitomo Mitsui Financial Group Inc. sold yen-denominated Additional Tier 1 bonds, becoming the first major global bank to issue such debt since the collapse of Credit Suisse Group AG last month.
Elsewhere in markets, Bitcoin held slightly above the closely watched $30,000 level. Oil steadied as investors weighed signs of shrinking US crude stockpiles against concerns over an uneven demand recovery.
Gold was flat and iron ore declined after Chinese authorities vowed to curb “unreasonable” price gains in their latest move to crack down on market speculation.
Key events this week:
- Eurozone CPI, Wednesday
- Fed releases Beige Book, Wednesday
- Fed’s John Williams gives a speech, Wednesday
- Fed’s Austan Goolsbee is interviewed on NPR, Wednesday
- 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 0.2% as of 7:03 a.m. London time. The S&P 500 rose 0.1%
- Nasdaq 100 futures fell 0.3%. The Nasdaq 100 was little changed
- Euro Stoxx 50 futures fell 0.2%
- Japan’s Topix index was little changed
- Hong Kong’s Hang Seng Index fell 0.8%
- The Shanghai Composite Index fell 0.3%
- Australia’s S&P/ASX 200 Index was little changed
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.0966
- The Japanese yen fell 0.3% to 134.53 per dollar
- The offshore yuan was little changed at 6.8886 per dollar
- The Australian dollar was little changed at $0.6729
- The British pound was little changed at $1.2431
Cryptocurrencies
- Bitcoin fell 0.5% to $30,278.86
- Ether fell 0.1% to $2,091.06
Bonds
- The yield on 10-year Treasuries advanced two basis points to 3.59%
- Australia’s 10-year yield advanced three basis points to 3.50%
Commodities
- West Texas Intermediate crude fell 0.3% to $80.63 a barrel
- Spot gold fell 0.2% to $2,000.48 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Sujata Rao and Naoto Hosoda.
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