Sydney, Nov 10 (BNA): Asian stock markets were nervous and the dollar held onto its overnight gains ahead of the big test of the US consumer inflation report, while market sentiment waned with the potential collapse of a major cryptocurrency exchange. investors.
With final results from the US midterm elections unavailable, investors were turning to inflation data coming later in the day, which is likely to show a drop in both monthly and annual core numbers for October to 0.5% and 6.5%, respectively, according to Reuters. .
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.6% in early trade, weighed down by huge declines in Chinese companies and Hong Kong’s Hang Seng Index, with Japan’s Nikkei losing 1%.
China is once again struggling with the spread of COVID, with the southern city of Guangzhou reporting thousands of cases. Apple Inc supplier Foxconn plans to update its forecast for the fourth quarter, after strict COVID restrictions persisted at its main plant in China despite the lifting of the lockdown.
“While global inflation has peaked, the cooling is not large enough or widespread to bring the price-raising cycles to a convincing outcome, in our view,” analysts at JPMorgan said.
However, analysts noted that some central banks in both developed and emerging markets are becoming more pessimistic as they fear that monetary tightening will dampen economic growth.
The futures market is currently showing that investors believe the target Fed rate will peak around 5.1% by next June, and chances of a 50 or 75 basis point rise are skewed in favor of a half point increase next month.
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 cryptocurrency world, bitcoin regained some ground in early trading 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.”
“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.”
The US dollar maintained most of its gains overnight against a basket of currencies.
Sterling gained 0.2% against the dollar after falling 1.6% in the previous session.
US Treasury yields were lower.
The yield on the standard 10-year note fell 6 basis points to 4.0866% while the yield on the two-year note fell by 5 basis points to 4.5732%.
In commodities, oil prices extended their slide after tumbling about 3% in the previous session on concerns about demand from China and rising US crude inventories.
US crude oil futures fell 0.3% to $85.59 a barrel, while Brent crude futures fell by a similar margin to $92.37.
Gold changed little, with the spot price reaching $1,705.92 an ounce.
SM