Stocks slip, dollar firm ahead of Jackson Hole conference

Date:

  • Fed sees sticking to aggressive tone – analysts
  • Expectations US final interest rate rise, dollar rises
  • New swings hit Chinese real estate stocks

SINGAPORE, Aug. 24 (Reuters) – Asian stock markets fell for the eighth consecutive session on Wednesday, with investors nervous about the magnitude of the problems in China’s real estate sector and bracing for an aggressive message from the Federal Reserve during Jackson This week’s hole symposium.

MSCI’s broadest index of Asia-Pacific stocks outside Japan (.MIAPJ0000PUS) fell 0.5%, while Japan’s Nikkei (.N225) fell by the same margin. The US dollar continued to lurk just below milestone highs on most major currencies and near a 20-year high on the euro.

Wall Street was stable on Tuesday after two days of heavy losses, while soft US data tempered concerns about rate hikes, but S&P 500 futures were pushed 0.2% lower in Asia, while FTSE futures and European futures also fell a bit.

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Late Tuesday, Minneapolis Fed president Neel Kashkari was the latest official to reiterate the Fed’s focus on controlling inflation above everything else, and traders are expecting something similar from Fed Chair Jerome Powell, who said Friday from Wyoming. speaks.

“It might be wiser for (Powell) to just come in with a flat, ‘Right now all we care about is cutting inflation,'” said ING economist Rob Carnell.

“Bond yields would rise a little further, with the desired effect… and then you can (later) start easing.”

Traders have raised their expectations of where Fed fund rates could peak, with current pricing pointing toward about 3.7% by mid-2023.

However, a recent series of softer US economic news has led to near-term stable government bond yields after rising in August.

US services and manufacturing surveys disappointed on Tuesday and July, new home sales fell to a 6-1/2 year low. read more

The two-year yield was held at 3.307% on Wednesday and the 10-year yield fell by 2 basis points (bps) to 3.0332%.

CHINA DIA

The US dollar, which has been supported by higher interest rate expectations, has also benefited from the poor comparative outlook in other parts of the world.

In Europe, benchmark gas prices have tripled in just over two months, and a winter of unreliable energy supplies from Russia is imminent.

Expected damage to growth and higher inflation are causing the euro to languish. On Wednesday, it bought $0.9956 after falling to $0.9905 on Tuesday.

In China, real estate stocks fell as gains brought back another reminder of the deep hole developers find themselves without access to easy credit. A Hong Kong-listed builders index (.HSCIPC) fell 2.5% to its 10-year low.

“People are still trying to understand the full extent of the harmful effects because it has multiple consequences,” said Samuel Siew, a market specialist at CGS-CIMB in Singapore.

“It’s still very difficult to measure the full severity of the situation. That’s what markets are trying to decipher and whether continued support is enough.”

The Hang Seng Index (.HSI) fell 1.3% on Wednesday, as did the Shanghai Composite (.SSEC), while the yuan fell sharply despite state media reports that there is no basis for a long-term decline. term.

Dollar strength weighed on the Aussie and kiwi elsewhere, although the yen rose slightly to 136.48 per dollar.

Brent crude futures plunged below $100 a barrel — the contract last fell 43 cents to $99.79 — amid some doubts about talk of cuts to Saudi supply. US crude oil futures fell 30 cents a barrel to $93.44.

Spot gold held steady at $1,747 an ounce. Bitcoin still bears the scars of a sudden slide late last week and is parked at $21,490.

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Editing by Ana Nicolaci da Costa and Jamie Freed

Our Standards: The Thomson Reuters Trust Principles.

The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

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