Asian Stocks Fall to Lowest in a Week; Dollar Steady After Hawkish Fed Comments
Stocks in Asia took a hit on Friday, dropping to their lowest levels in a week as the dollar remained stable amidst concerns about elevated Treasury yields. The gloomy outlook was exacerbated by hawkish comments from U.S. Fed Chair Jerome Powell, which dashed hopes for a peak in interest rates.
According to Reuters, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1% to a one-week low of 486.39. This marks the fourth consecutive session of losses and puts the index on track for a weekly decline of 0.5%. The somber mood is expected to continue as futures indicate a steeply lower open for Europe. Eurostoxx 50 futures were seen down 0.73%, German DAX futures dropped 0.66%, and FTSE futures were 0.78% lower.
Powell’s comments, coupled with a weak auction of $24 billion in 30-year Treasuries, pushed yields higher, casting a shadow on equities while providing support to the dollar. U.S. rate futures have reportedly priced in about a 60% chance of a rate cut at the Fed’s June 2024 meeting, compared to odds of about 70% before Powell’s speech. Chinese stocks eased 0.6%, while Hong Kong’s Hang Seng Index was 1.6% lower amidst worries over the world’s second-biggest economy after Thursday’s data showed consumer prices dipped back into contraction.
Spot gold was little changed at $1,956.80 per ounce and on track for their worst week in more than a month, down 1.8%, as elevated yield and a stronger dollar weighed. U.S. crude rose 0.38% to $76.03 per barrel, while Brent was at $80.39, up 0.47% on the day.
The news comes on the heels of the Tokyo Stock Exchange being open for a new day of trading.
Reporting by Ankur Banerjee in Singapore; Editing by Tom Hogue and Christian Schmollinger.