In Asian Equity Markets stocks fell on Wednesday as reality bit on hopes for a soft economic landing in the United States, curbing investors’ enthusiasm about China’s major shift in its tough zero-COVID policy. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.2 percent and Japan’s Nikkei fell 0.7 percent. The Shanghai Composite Index fell 0.6 percent, Hong Kong’s Hang Seng fell 1 percent and the yuan was broadly steady, giving up early gains. Market reaction, however, was muted as the focus shifts to how well China can execute its policy shift, especially if new COVID cases rise over winter.
In Currency Markets the dollar crept higher on Wednesday as some of the biggest U.S. banks warned of an impending recession, which dampened appetite for riskier assets and kept the greenback in demand. Against the dollar, sterling was last 0.03 percent lower at $1.2131, after falling 0.4 percent overnight. The greenback rose 0.2 percent against the Japanese yen to 137.30 yen, following a 0.16 percent overnight gain. Elsewhere, the euro was last 0.08 percent lower at $1.0465. The Aussie gained 0.19 percent to $0.6701. The kiwi rose 0.13 percent to $0.6326.
In US Equity Markets stocks ended lower on Tuesday, with the S&P 500 extending its losing streak to four sessions, as skittish investors fretted over Federal Reserve rate hikes and further talk of a looming recession. The Dow fell 1.03 percent, to close at 33,596.34, the S&P 500 lost 1.44 percent, to finish at 3,941.26 and the Nasdaq Composite fell 2 percent, to end on 11,014.89. The energy sector fell 2.7 percent on Tuesday. The S&P banks index lost 1.4 percent to its lowest close since Oct. 21. Apple Inc, Amazon.com Inc and Alphabet Inc fell between 2.5 percent and 3 percent.
In Commodities Markets U.S. oil prices fell in frenzied trading on Tuesday to their lowest settlement levels this year, with Brent finishing below $80 per barrel for the second time in 2022, as investors fled the volatile market in an uncertain economy. Brent crude futures fell 4 percent, to settle at $79.35 a barrel. WTI crude futures fell 3.5 percent, to settle at $74.25 a barrel, their lowest settlement this year. Spot gold rose 0.1 percent to $1,769.42 per ounce. Spot silver fell 0.8 percent to $22.07 per ounce, while platinum fell 1 percent to $987.75. Palladium shed 1.3 percent to $1,852.38.
In European Equity Markets stocks fell on Tuesday, dragged down by weakness in healthcare and rate-sensitive tech stocks, with investors concerned about a global economic slowdown in the run-up to a raft of major central bank decisions. The region-wide STOXX 600 index closed 0.6 percent lower as optimism around China easing its COVID-19 restrictions was overshadowed by worries around interest rates and the likelihood of recession. Shares of Aeroports de Paris fell 12.6 percent after Royal Schiphol Group sold its remaining stake in the French airports company at a sharp discount to ADP’s recent share price.
In Bond Markets U.S. Treasury yields fell on Tuesday in largely thin trading, with no major economic data on the calendar as investors prepared for a slowdown in the pace of the Federal Reserve’s tightening cycle. Since a 15-year high touched on Oct. 21, the benchmark 10-year yield has fallen nearly 80 basis points (bps). It was last down 8.4 bps at 3.515 percent. The U.S. two-year yield has fallen nearly 53 bps since more than a 15-year peak hit on Nov. 4. It was last down 4.2 bps at 4.352 percent. In afternoon trading, the yield on the 30-year Treasury bonds was down 8.9 bps at 3.527 percent.