(Bloomberg) — Asian stocks slid along with U.S. and European equity futures Wednesday amid concern that faster inflation and the surge in commodities could test the economic recovery from the pandemic.
Taiwan’s benchmark dropped as much as 8.6% on a tech rout and Covid-19 curbs, with margin calls also taking some blame. An Asia-Pacific stock gauge was set for its lowest close since January. Nasdaq 100 futures underperformed after dip buyers helped the tech-heavy gauge finish little-changed overnight. The S&P 500 slid for a second day.
Treasury yields were steady and the dollar rose. Investors are awaiting inflation data and government debt sales in the U.S. — events that could spark market volatility. Consumer-price inflation is set to quicken, with the year-on-year comparison amplified by the shock of Covid-19 shutdowns in 2020.
Debate over whether price pressures will be persistent enough to force the Federal Reserve to tighten policy sooner than current guidance suggests comes as abundant stimulus has powered a rally in global equities, raising concerns valuations had become expensive. A chorus of Fed officials said the U.S. economy is on the road to recovery but still faces risks, and reiterated that it’s premature to discuss pulling back monetary support.
Equity markets have sold off quite heavily recently “because we got to year-end target figures for a lot stock market indices already,” Oliver Kettlewell, Mashreq Capital head of fixed income and global portfolios, said on Bloomberg Television. Semiconductor supply bottlenecks and commodity-induced inflation concerns spooked investors, he added.
Oil was steady above $65. The biggest U.S. pipeline is still closed in the wake of a cyberattack, leading to acute fuel shortages in some parts of the nation.
Australia’s 10-year bond yield jumped after the government unveiled a big-spending budget to spur the country’s rebounding economy. The Commonwealth Bank of Australia warned the country could lose its AAA credit rating.
Copper traded near a record, and the Bloomberg Commodity Spot Index hovered around the highest levels in almost a decade. Palm oil futures in Kuala Lumpur climbed to the highest intraday level on record. A Chinese commodity exchange raised trading limits and margin requirements as authorities try to temper prices after a scorching rally in industrial commodities.
MLIV’s Question of the Day: How Priced In Is a European Reopening?
Here are some key events to watch this week:
U.S. CPI report Wednesday is forecast to show prices continued to increase in AprilBank of England Governor Andrew Bailey speaks Wednesday
These are some of the main moves in markets:
S&P 500 futures fell 0.4% as of 2:15 p.m. in Tokyo. The S&P 500 index fell 0.9%Nasdaq 100 contracts lost 0.7%Japan’s Topix index shed 2.1%Australia’s S&P/ASX 200 index was down 1.2%South Korea’s Kospi fell 2.1%Hong Kong’s Hang Seng index fell 0.4%China’s Shanghai Composite index was flatEuro Stoxx 50 futures retreated 0.3%
The yen fell 0.2% to 108.85 per dollarThe offshore yuan was at 6.4397 per dollar, down 0.2%The Bloomberg Dollar Spot Index added 0.3%The euro traded 0.2% lower at $1.2122
The yield on 10-year Treasuries was steady around 1.62%Australia’s 10-year bond yield climbed five basis points to 1.78%
West Texas Intermediate crude was at $65.33 a barrelGold fell 0.4% to $1,829.97 an ounce
For more articles like this, please visit us at bloomberg.com
Subscribe now to stay ahead with the most trusted business news source.
©2021 Bloomberg L.P.