NEW YORK / SYDNEY (Reuters) – Asian equities fell to a one-month low on Friday as rising US Treasury yields shook stock investors again, raising the dollar to a three-month high, which in turn his shot at the Japanese yen.
Energy markets have not been spared volatility either, with oil prices adding to big gains overnight after the Organization of the Petroleum Exporting Countries (OPEC) and its allies agreed to maintain its supply cuts mainly in April as it expects a stronger recovery. of the demand from the coronavirus pandemic. [O/R]
Shares in Australia fell by more than 1%, shares of the Japanese stock Nikkei fell by 1.6% and shares in Seoul fell by 1.4%. Chinese stocks were in the red, with the CSI300 blue team index down 1.5%.
This sent the widest MSCI index of Asia-Pacific equities outside Japan to 684.52, the lowest since February 1.
E-Mini S&P futures was 0.5% lower.
US stocks fell on Thursday after Federal Reserve Chairman Jerome Powell disappointed some investors, noting that the Fed could step up long-term bond purchases to maintain longer-term interest rates.
The technologically strong Nasdaq Composite fell 2.1%, dropping it by about 10% from closing the record on February 12 and placing it in the correction territory. [.N]
Although Powell made it clear that the Fed was not about to change its position on ultra-weak monetary policy any time soon, some analysts still feared that the Treasury’s high yields could herald higher borrowing costs, thus limiting the fragile economic recovery. the USA.
“The market has been in Powell’s apparent quest to push back harder on the recent rise in yields,” said Ray Attrill, head of foreign exchange strategy at National Australia Bank.
“The volatility seen yesterday in local interest rate markets, with another significant increase in long-term interest rates and government bond yields, has set the stage for a turbulent market today, if overnight developments are a guide.”
Bond investors with a declining view of the Treasury took heart in Powell’s remarks and sold the banknotes. The yield on 10-year Treasuries rose over 1.5% to 1.5727%, but still below a one-year high of 1.614% last week. [US/]
The yield curve, a measure of economic expectations, has worsened on the rise in yields, with the difference between two- and 10-year yields increasing by another 6.3 basis points overnight.
Rising treasury yields have strengthened demand for the dollar. The dollar index rose to a three-month high of 91.734. [USD/]
A stronger dollar prevented the yen. By early Friday, the yen was down to 107.97, the lowest since July 1, although it reduced those losses and was last at 107.85.
The euro was also triggered by a firmer dollar, with the common currency slowing to $ 1.1960.
Rising yields and the strength of the dollar beat gold prices, which fell to a nine-month low as investors sold the precious metal to reduce the opportunity cost of holding the non-yielding asset. [GOL/]
Spot gold fell another 0.2% early Friday to $ 1,692.26 an ounce, trading below $ 1,700 for the first time since June 2020.
Oil prices widened early on Friday after rising overnight.
US futures rose 17 cents, or 0.3 percent, to $ 64, staying below a 13-month high on Thursday. Crude brent rose 10 cents to $ 66.84 a barrel.
On the cryptocurrency market, bitcoin fell 4% on Friday to 46,422 USD.
Koh Gui Qing’s report in New York and Swati Pandey in Sydney; Edited by Sam Holmes and Christian Schmollinger