Talking Points:
- Asian stocks slipped across the board
- The US Dollar’s bid broadly held
- Economic news was scant but a European Central Bank policy meeting looms
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Following Wall Street’s calamitous Tuesday was never going to be easy for Asia Pacific markets and, sure enough, Wednesday saw broad based falls.
Investors Stateside worried about the effects of rising interest rates on US growth as the ten-year Treasury yield touched 3% for the first time in more than four years. There was no key Asia Pacific economic data to drag investors’ gaze away, which left local markets with little to do but track New York lower.
The Nikkei 225 ended down 0.28% with Chinse and South Korean stocks also in the red. Australian and New Zealand markets were closed for the ANZAC Day break.
The US Dollar held up broadly, supported by those yields, but its rise did slow a little as the Asian session wore on. The week still offers two major central bank monetary policy decisions. The European Central Bank looms on Thursday with the Bank of Japan following it on Friday. Neither is expected to move the policy dials but the rate-setters’ economic take will as ever command broad market interest.
Gold prices remained under some pressure– higher bond yields can eat into non-yielding gold’s attractions. Crude oil prices were steady but rising US supply reportedly threatened the bullishness of recent sessions.
Spot US crude has settled into a broad range in the past couple of weeks, after considerable climbs, andnow looks set to test the bottom of that band once again.
There’s not a great deal left on Wednesday’s economic data schedule but, given the current focus on rising oil prices, official US inventory data are bound to draw a crowd.
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— Written by David Cottle, DailyFX Research
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