December 5, 2022

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Asian stocks fall ahead of US CPI, cryptocurrency fears escalate

Asian stocks fall ahead of US CPI, cryptocurrency fears escalate

  • Dollar Still Flat, Cryptocurrency Raising Spread Fears
  • European markets are preparing to open lower
  • Mainland China and Hong Kong stocks affected by rise in COVID cases
  • Focus on US inflation for signs of slowing Fed rate hikes

SYDNEY (Reuters) – Asian stock markets slipped on Thursday and the dollar held overnight gains ahead of the big test of a US consumer price inflation report, while market sentiment waned as the potential crash of a major cryptocurrency exchange spooked investors. .

With no definitive results available from the US midterm elections, investors were looking to inflation data coming later in the day, which is likely to show a slowdown in both the monthly and annual core numbers for October to 0.5% and 6.5%, respectively. . According to a Reuters poll.

European markets are poised to expand the cautious mood, with Eurozone Stoxx 50 futures down 0.7%. However, US S&P 500 futures rose 0.2% while Nasdaq futures rose 0.3%.

MSCI’s broadest index of Asia Pacific shares outside Japan (MIAPJ0000PUS.) It fell 1.2%, influenced by a 1.0% drop in Chinese charts (.CSI300) It fell 1.8% in the Hang Seng Index in Hong Kong (.HSI).

Japan’s Nikkei Index (.N225) He lost 1.0%.

China is once again struggling with the spread of COVID, with the southern city of Guangzhou reporting thousands of cases. Apple company (AAPL.O) Foxconn supplier (2317.TW) It plans to update its fourth-quarter forecast Thursday, after strict COVID restrictions remained in place at its main plant in China despite the lifting of the lockdown.

Elsewhere, the focus has remained on inflation.

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“The big possibility is that we see a number that’s more or less in line with expectations — it’s clearly difficult to call, and we may need to wait for guidance from federal speakers in the next session to see how they interpret it,” Chris said. Weston, Head of Research at Pepperstone Brokerage.

Minneapolis Federal Reserve Bank of Minneapolis President Neil Kashkari said Wednesday that it is “totally premature” to discuss any pivot away from the Fed’s current policy tightening.

A large number of Federal Reserve officials including Board Governor Christopher Waller, Philadelphia Bank President Patrick Harker, and Dallas Bank President Laurie Logan will speak tonight.

The futures market is currently showing that investors believe that the Fed may step down to 50 basis points next month, while the target Fed rate could peak at 5.1% by next June.

Overnight on Wall Street, stocks closed lower as the gains made by Republicans in the midterm elections looked more modest than some had expected. Republicans still favored winning control of the House, but major races were too close to call.

In the crypto world, the price of bitcoin rose 3.6% to $16,443 on Thursday, after dropping for two consecutive sessions to its lowest level since late 2020.

Binance, the world’s largest cryptocurrency exchange, said late Wednesday that it had decided not to acquire its smaller rival FTX, which has faced a severe liquidity crisis and faced bankruptcy without more capital.

“You can’t deny the growing relationship between bitcoin and risky assets,” said Stephen Innes, managing partner at SPI Asset Management. “FTX news has a huge impact on asset prices.”

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“Bitcoin’s spillovers are not negligible, and given the proliferation of cryptocurrencies, it could mean more forced liquidation of other assets to cover margin calls as investors in long positions are significantly wrong.”

On Thursday, the US dollar held most of its overnight gains against a basket of currencies.

Sterling rose 0.4% against the dollar to $1.1409, after falling 1.6% in the previous session.

US Treasury yields were lower on Thursday.

The yield on the benchmark 10-year note fell 8 basis points to 4.0751% while the yield on the two-year note fell by 3 basis points to 4.5963%.

In commodities, oil prices pared their losses earlier on Thursday, after tumbling about 3% in the previous session on demand concerns from China and rising US crude stocks.

US crude oil futures settled at 0.3% to $85.83 a barrel, while Brent crude futures settled at $92.71.

Gold was higher, with a spot price of $1709.08 an ounce.

Reported by Stella Keogh; Editing by Bradley Perrett and Sam Holmes

Our criteria: Thomson Reuters Trust Principles.