© Reuters. FILE PHOTO: A man with a protective mask, in the middle of the coronavirus epidemic (COVID-19), walks past an electronic board showing stock indices of various countries, including the Russian Trading System (RTS) index, which is empty, in front of a brokerage house in
HONG KONG (Reuters) – Asian stocks weakened on Tuesday after Wall Street reached a confirmed bearish market milestone and bond yields peaked in two decades for fears that aggressive US interest rate hikes will push the world’s largest economy in recession.
MSCI’s broadest Asia-Pacific stock index outside of Japan fell 0.9%.
Australian shares of S & P / ASX200 sank 5% in early trading, while the stock index fell 1.74%.
In Hong Kong, it fell 1.44%, and the Chinese CSI300 index fell almost 1% at the opening.
The negative tone in Asia followed a gloomy session in the US on Monday, at which Goldman Sachs (NYSE 🙂 forecast an increase in the interest rate of 75 basis points at the next Federal Reserve policy meeting on Wednesday.
“The U.S. will see the rate rise faster and more than Wall Street expected,” James Rosenberg, an adviser to Ord Minnett in Sydney, told Reuters. “There is likely to be a twofold impact of lower earnings forecasts and further price reductions on earnings.”
Expectations for an aggressive increase in US interest rates rose after inflation rose 8.6% sharper than forecast in the year to May.
Fear of higher rates that would lead to a recession in the U.S. dropped 3.88% while losing 4.68%. It fell 2.8%.
The reference S&P 500 is now down more than 20% from its latest record high, confirming the bear market, by the usual definition.
In U.S. trading, reference 10-year treasury yields reached their highest level since 2011 on Monday, and a key part of the yield curve reversed for the first time since April as investors prepared for the prospect of trying to stem rising inflation endanger the economy.
Early in Asia, benchmark yields rose to 3.3828% compared to the US close of 3.371% on Monday.
The two-year yield, growing with traders ’expectations of higher rates on Fed funds, reached 3.4002% compared to a close in the US of 3.281%.
“Higher inflation, slower growth and higher interest rates are a harmful combination for financial assets,” ANZ strategists wrote on Tuesday.
The dollar fell 0.06% against the yen to 134.32, but remains close to its more than two-decade high of 135.17 reached on Monday.
The single European currency remained unchanged at $ 1.0407, losing 3.04% in a month, while, following the dollar against a basket of major currencies, it rose to 105.19.
it fell about 4.5% on Tuesday to $ 21,416, the lowest level in 18 months, extending a 15% drop on Monday as markets were shaken by crypto lender Celsius who suspended the withdrawal.
fell 0.06% to $ 122.14 a barrel. fell 0.13% to 122.14 per barrel.
Gold was slightly lower with a spot price of $ 1,818.7395 per ounce. [GOL/]