Singapore, Feb. 21 (BNA): Asian stocks fell on Tuesday as the prospect of the US central bank staying on its hawkish path weighed on sentiment, as investors looked to minutes from the Federal Reserve’s latest meeting for more monetary policy. clues.
MSCI’s broader index of Asia-Pacific shares outside Japan fell 0.34% to 531.85, hovering around a six-week low of 529.30 touched last week.
The index is down about 3% this month after jumping 8.6% in January, as a string of strong economic data in the United States reinforced concerns that interest rates may need to rise further and stay higher for longer, Reuters reported.
The market is now pricing in US interest rates to peak at 5.30% in July and remain above 5% by the end of the year, diverging from expectations for deeper rate cuts this year.
Japan’s Nikkei rose 0.01%, while Australia’s S&P/ASX 200 fell 0.52%. Chinese stocks were set to start flat while Hong Kong’s Hang Seng opened 0.1% lower.
“The backdrop of US inflation concerns keeps the risk of a tighter-than-expected monetary policy in mind, and yields remain a key focus as US markets return later today,” said Saxo Markets Strategists.
US markets were closed on Monday for the President’s Day holiday.
The yield on the 10-year Treasury rose 3.5 basis points to 3.863%, after touching a three-month high of 3.929% on Friday.
The yield on the 30-year Treasury rose 1 basis point to 3.899%, while the yield on the 2-year US Treasury note, which is usually in line with interest rate expectations, rose 5.4 basis points to 4.677%.
Investors are firmly focused on the release of the minutes of the last meeting of the Federal Reserve on Wednesday when it raised interest rates by 25 basis points.
In the currency market, the dollar hovered near recent highs as the three-week rally faded, with traders eyeing Europe and the United States.
Manufacturing data later on Tuesday and the core PCE price index on Friday to help guide their next steps.
Philip Wee, currency analyst at DBS, said the market is bracing for another surprise in PCE data after strong non-farm payrolls and CPI readings in the US this month.
The dollar index, which measures the greenback against six other rivals, was latest at 104.01, just below a six-week high of 104.67 touched on Friday. The euro fell 0.12% to $1.0669 and is set to snap four straight months of gains and end February lower.
The yen fell 0.12%, to 134.40 per dollar, while the pound sterling fell at 1.2022 dollars, down 0.13%.
US crude rose 1.02% to $77.12 a barrel, and Brent crude reached $83.80, down 0.32% on the day.
Rial