© Reuters.
Gina Lee
Investing.com – Asia Pacific equities almost rose on Tuesday morning, while US and European equities futures fell. Bonds were under pressure as the chairman of the Federal Reserve Board adopted a more hawkish tone on monetary policy.
Japan surged 1.63% by 10:17 pm (Greenwich Mean Time 2:17 am) and the market reopened after the holidays.
South Korea rose 0.66% and Australia rose 1.18%.
Hong Kong rose 0.64%.
China rose 0.15% and fell 0.81%.
US Treasuries expanded losses on Monday. This included one of the largest daily rises in short-term yields in the last decade. The difference between US 5-year and 30-year yields is close to the smallest since 2007. Debt in Australia and New Zealand was also on the decline.
The depreciation of the Japanese yen could boost the outlook for exporters in Australia, South Korea and Japan, where inventories have increased.
Powell said the Fed is ready to raise interest rates by 0.5 percentage points at the next policy meeting if necessary. The central bank raised interest rates to 0.5% as it took over the latest one last week.
Bond market movements continued to be the focus for some investors concerned about the economic downturn.
“If Powell emphasizes that he’s trying to deal with inflation, he’s making mistakes, and his expectations for inflation are wrong, he admits it and says he’s ready to do everything he needs. Is definitely a relief for equity investors, “Eringibbs, chief investment officer of Main Street Asset Management, told Bloomberg.
Derivative traders on Monday priced at a rate hike of about 7.5 at the remaining six Fed meetings in 2022.
“In the long run, 2.3% over a decade isn’t that high,” Linda Dussel, senior equity strategist at Federaled Hermès (NYSE 🙂 Inc., told Bloomberg.
While the Fed’s tightening can disrupt the overall yield curve, the gap between the three-month and ten-year periods is still on the rise, supporting the view that the U.S. economy remains strong, she said. Added.
In contrast to the Federal Reserve, the People’s Bank of China continues to keep up with the latest COVID-19 outbreaks, raising expectations for easing monetary policy to support the economy.
China’s State Council has promised stronger monetary policy support, but warned on Monday that the market would be flooded with liquidity, according to local media. The government has also vowed to avoid measures that could hurt market sentiment.
European Central Bank Governor Christine Lagarde will speak at the BIS Innovation Summit later that day, followed by Powell and Bank of England Governor Andrew Bailey the next day.
Meanwhile, British Prime Minister Rishi Sunak will release his “Spring Statement” on the budget on Wednesday. US President Joe Biden will attend the NATO Emergency Summit in Brussels the next day.
Disclaimer: Fusion media We inform you that the data contained on this website is not necessarily real-time or accurate. All CFDs (stocks, indices, futures) and forex prices are provided by the market maker, not the exchange, so prices may not be accurate and may differ from actual market prices. In other words, price is an indicator and is not suitable for trading purposes. Therefore, Fusion Media is not responsible for any transactional losses that may occur as a result of using this data.
Fusion media Alternatively, anyone involved with Fusion Media will not be liable for any loss or damage resulting from reliance on the data, quotes, charts, trading signals and other information contained on this website. Be fully informed about the risks and costs associated with financial market transactions. This is one of the most risky forms of investment possible.