Customize Consent Preferences

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below.

The cookies that are categorized as "Necessary" are stored on your browser as they are essential for enabling the basic functionalities of the site. ... 

Always Active

Necessary cookies are required to enable the basic features of this site, such as providing secure log-in or adjusting your consent preferences. These cookies do not store any personally identifiable data.

No cookies to display.

Functional cookies help perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.

No cookies to display.

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics such as the number of visitors, bounce rate, traffic source, etc.

No cookies to display.

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

No cookies to display.

Advertisement cookies are used to provide visitors with customized advertisements based on the pages you visited previously and to analyze the effectiveness of the ad campaigns.

No cookies to display.

Connect with us

Hi, what are you looking for?

slide 3 of 2
THE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & LifestyleTHE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & Lifestyle

Economy

Economy

Stocks retreat, US yields advance, and the dollar strengthens on hawkish Fed

Passersby walk past an electric board displaying Japan's Nikkei share average outside a brokera... Passersby walk past an electric board displaying Japan's Nikkei share average outside a brokerage in Tokyo, Japan April 18, 2023. REUTERS/Issei Kato
Passersby walk past an electric board displaying Japan's Nikkei share average outside a brokera... Passersby walk past an electric board displaying Japan's Nikkei share average outside a brokerage in Tokyo, Japan April 18, 2023. REUTERS/Issei Kato

Listen to the article now

Asian stocks followed Wall Street’s lead on Thursday, falling as investors perceived the Fed’s recent policy pronouncements as indicating higher-for-longer interest rates.

MSCI’s broadest Asia-Pacific share index outside Japan (.MIAPJ0000PUS) fell 0.4% by early afternoon Hong Kong time. Japanese Nikkei fell 0.6%. Chinese blue-chip (.CSI300) fell 0.6%, while Hong Kong’s benchmark fell 1.3%.

Two-year U.S. Treasury note yields reached a 17-year high of 5.1970% on Thursday morning and stayed around 5.18% by afternoon.

U.S. 10-year Treasury yields reached 4.4310%, a 16-year high, while Japan’s 10-year government bond yield reached a decade high.

Given the Fed’s hawkish stance, “We expect bond yields to see further upside in the very near term,” said J.P. Morgan Asset Management APAC chief market analyst Tai Hui.

He said, “However, high-interest rates will eventually cool the economy, leading to falling yields.” Still, they remain positive on long-tenor government bonds, investment-grade corporate debt, growth, and tech equities.

Ben Luk, senior multi-asset strategist at State Street Global Markets, said the Fed’s latest meeting was not hawkish but had two surprises.
Luk said that 2024 forecasts were slightly higher than projected, and Fed remarks suggested macroeconomic growth would continue even with rates higher for longer.

On Wednesday, the U.S. central bank kept interest rates and predicted a year-end increase, saying monetary policy will be tighter than expected through 2024.

By year-end, the median federal funds rate expectation is 5.1%, up from 4.6% in June.

Even if inflation slows in 2023 and beyond, the Fed expects only modest initial rate cuts.

U.S. policymakers’ median rate estimates for the next two years were revised upward, causing the dollar to bounce, Treasury rates to reach multi-year highs, the yield curve to flatten, and stocks to fall.

On Thursday, the dollar index reached 105.59, its highest level since March 9, pushing the yen near its worst since November.

Sterling fell to multi-month lows after a disappointing inflation report on Wednesday, raising worries about whether the Bank of England will maintain rates on Thursday like the U.S.

In early afternoon Asia, major stock futures fluctuated. S&P 500 e-minis fell 0.3%. Euro Stoxx 50, DAX, and FTSE futures lost 1%.

Asian markets will also be influenced by Indonesia, the Philippines, and Taiwan’s monetary policy decisions on Thursday and the Bank of England’s balanced call.

Oil prices dipped in Asian trade on Thursday after the biggest monthly drop the day before. U.S. crude fell 0.72% to $89.01. Brent sank to $92.87/barrel. Spot gold fell to $1,927.96 an ounce.


Comment Template

You May Also Like

Business

Grok, Elon Musk’s AI chatbot, started letting users post text-generated images to X on Tuesday. The tool was quickly used to flood social media...

Business

The universal childhood experience of writing a fan letter to an idol? Mickey Mouse, please save my 1999 Disneyland note. New Google ads claim...

Technology

The order came after Austin talked on the phone with Yoav Galant, the Israeli minister of defense, on Sunday evening. Tensions were rising after...

Politics

  Harris has a different tone than Biden when she talks about Gaza and other Middle East problems, but her policies are exactly the...

Notice: The Biznob uses cookies to provide necessary website functionality, improve your experience and analyze our traffic. By using our website, you agree to our Privacy Policy and our Cookie Policy.

Ok