In Asian Equity Markets stocks were under pressure on Wednesday on worries about the fallout from China’s pandemic lockdowns, while the yen slightly extended its record losing streak as traders put Japan’s ultra-easy monetary policy settings to the test. MSCI’s broadest index of Asia-Pacific shares outside Japan was steady as modest losses in Hong Kong and Shanghai offset gains in Sydney. Japan’s Nikkei trimmed early gains to stand 0.5 percent higher by mid morning. The broader Topix rose 1.03 percent to 1,915.15.
In Currency Markets the dollar climbed to a fresh two-decade peak to the yen on Wednesday, buoyed by more Federal Reserve officials pushing for sizeable interest rate hikes, while the Bank of Japan stepped into the market again to defend its ultra-low rate policy. The greenback reached 129.43 yen for the first time since April 2002 before last trading 0.3 percent higher at 129.295. The greenback touched 0.95305 franc for the first time since June 2020 before changing hands 0.06 percent stronger at 0.95275. The euro traded flat at $1.0788, staying not far from last week’s low of $1.0758.
In US Equity Markets stocks ended higher on Tuesday, as investors used positive earnings to advance Wall Street’s main indexes and took relief from two U.S. Federal Reserve officials offering more dovish comments on interest rate rises than one of their counterparts. The Dow rose 1.45 percent, to 34,911.2, the S&P 500 gained 1.61 percent, to 4,462.21 and the Nasdaq Composite added 2.15 percent, to 13,619.66. Johnson & Johnson advanced 3.1 percent to a second record close in three sessions, as the drugmaker’s quarterly profit exceeded market expectations and it raised its dividend payout.
In Commodities Markets oil prices were down about 5 percent in volatile trading on Tuesday on demand concerns after the International Monetary Fund (IMF) cut its economic growth forecasts and warned of higher inflation. Brent crude fell 5.22 percent, to settle at $107.25 a barrel, while U.S. West Texas Intermediate fell 5.22 percent, to settle at $102.56 a barrel. Spot gold fell 1.3 percent to $1,953.19 per ounce. Meanwhile, spot silver fell 2.4 percent to $25.21 per ounce and platinum was down 2.3 percent at $987.04. Palladium lost 2.1 percent to $2,388.57.
In European Equity Markets stocks fell on Tuesday as rising bond yields, worries about the war in Ukraine and a batch of upcoming earnings kept investors on edge, while energy shares outperformed despite plunging oil prices. The pan-European STOXX 600 lost 0.8 percent with defensive stocks including healthcare and consumer staples leading declines. Scor fell 5.2 percent after the French reinsurer said it expects to book charges for claims related to the Ukraine conflict. TotalEnergies, BP Plc and Shell were the biggest boosts to the STOXX 600, up between 0.4 percent and 1.6 percent.
In Bond Markets U.S. Treasury yields continued to march to three-year highs on Tuesday and 30-year yields tapped the 3 percent level as investors prepared for the Federal Reserve to aggressively raise rates as it tries to stem rising inflation. Benchmark 10-year note yields rose to 2.930 percent, the highest since December 2018. Thirty-year yields reached 3.018 percent, the highest since March 2019. Yields on 10-year Treasury Inflation-Protected Securities (TIPS) also approached positive territory, and last traded at minus 2 basis points.