Asian Markets Sink On Rate Worries As US Inflation Surprises
Mohammad Ali (@ChaudhryMAli88) Published March 15, 2024 | 05:54 PM
Asian markets sank in line with Wall Street on Friday after a sharper-than-expected jump in US wholesale prices dealt a blow to hopes for interest rate cuts
Hong Kong, (UrduPoint / Pakistan Point News - 15th Mar, 2024) Asian markets sank in line with Wall Street on Friday after a sharper-than-expected jump in US wholesale prices dealt a blow to hopes for interest rate cuts.
The surprisingly large bump in February's producer price index followed a forecast-beating read on consumer prices earlier in the week and overshadowed separate figures pointing to a slowdown in retail sales.
The reports also came after above-estimate data for January and will likely instill nervousness on trading floors ahead of the Federal Reserve's next policy decision on March 19-20.
While officials are not expected to move on rates, their post-meeting statement will be pored over for an idea of their thinking, with many -- including boss Jerome Powell -- having warned they will only cut when confident inflation is under control.
The bank's dot plot estimates for rates through the rest of the year will also be closely examined, with markets pricing in three cuts -- in line with policymakers' most recent forecasts.
Analysts said the latest figures suggested the personal consumption expenditures (PCE) deflator, the Fed's preferred gauge of inflation, could come in higher than hoped.
All three main indexes on Wall Street ended in the red as the recent strong rally faded on rate-cut worries and profit-taking, with a jump in yields denting optimism and sending the dollar higher.
"Equity and bond bulls are staring at their calendars and drawing a 'big red circle' around the 20th of this month," said Jose Torres of Interactive Brokers.
"Folks are concerned Powell may have to pull a dangerous U-turn during his ride on the monetary-policy highway.
His dovish messaging since December has driven an intense loosening in financial conditions."
Hong Kong shed around 1.8 percent -- having enjoyed a strong run-up at the start of the year -- while there were also losses in Tokyo, Sydney, Seoul, Singapore, Wellington, Taipei, Manila and Jakarta.
China's decision not to cut interest rates also weighed on sentiment as authorities refuse to embark on a strong stimulus drive despite the economy struggling to recover and the property sector still in the doldrums.
Bitcoin was in retreat, having hit a fresh record high of $73,797 Thursday.
Oil held most of its gains, sitting around its highest levels since November, after the International Energy Agency forecast demand would pick up more than previously expected and reports said US stockpiles had fallen.
- Key figures around 0230 GMT -
Tokyo - Nikkei 225: DOWN 0.1 percent at 38,751.54 (break)
Hong Kong - Hang Seng Index: DOWN 1.8 percent at 16,658.65
Shanghai - Composite: DOWN 0.3 percent at 3,030.68
Dollar/yen: UP at 148.51 yen from 148.28 yen on Thursday
Euro/dollar: DOWN at $1.0875 from $1.0889
Pound/dollar: DOWN at $1.2734 from $1.2752
Euro/pound: UP at 85.40 pence from 85.36 pence
West Texas Intermediate: DOWN 0.1 percent at $81.17 per barrel
Brent North Sea Crude: DOWN 0.2 percent at $85.27 per barrel
New York - Dow: DOWN 0.4 percent at 38,905.66 points (close)
London - FTSE 100: DOWN 0.4 percent at 7,743.15 points (close)
Related Topics
Recent Stories
Wembanyama in France: NBA Spurs to play Pacers in Paris in January
Russian missile kills two in Ukraine's Odesa: governor
Dutch Embassy celebrates King Willem-Alexander's birthday
Need of concrete steps stressed for safe, nutritious milk availability
Scotland's leader Yousaf quits after a year
Services of GDA Pakistan China Friendship Hospital launched
Mining giants Vale, BHP propose $25 bn settlement over Brazil dam collapse
Georgia ruling party stages mass rally to counter protests
Bayern ready for 'extraordinary' Bellingham, says Tuchel
PTI leaders get interim bail
Tennis: ATP/WTA Madrid Open results - 2nd update
French actor Depardieu released after sexual assault questioning
More Stories From Business
-
Aramco acquires 40% shares in Go Petroleum
42 minutes ago -
US stocks rise on tech outlook as yen rebounds
3 hours ago -
Philips settles US sleep machine cases for $1.1 billion
3 hours ago -
G7 eyes possible end date for coal-fired power plants
3 hours ago -
Continuing tight monetary stance SBP maintains policy rate at 22%
4 hours ago -
BankIslami achieves remarkable financial results of Rs 6.3 Billion
4 hours ago
-
FM Dar meets Saudi Energy Minister
4 hours ago -
Punjab to unveil comprehensive initiatives in upcoming budget: Minister
5 hours ago -
Agri experts stress quality seed at farm level to overcome food insecurity
5 hours ago -
US stocks rise on tech outlook as yen rebounds
5 hours ago -
PSMA refutes news about ban on sugar export
4 hours ago -
SBP decides to keep policy rate unchanged at 22 per cent
6 hours ago