Track shipments

Asian markets follow Wall St plunge amid growing rate fears

Hong Kong – Asian markets fell again on Tuesday and the dollar held on to its gains as traders grew concerned that the Federal Reserve would continue to raise interest rates to fight inflation.

With the Jackson Hole Symposium of Central Bankers and CFOs happening this week, the focus is on what Fed Chief Jerome Powell is saying about his plans to fight prices, many officials fearing that the economy could plunge into recession.

The equities’ losses appear to mark the end of a nearly two-month rally from June lows, fueled by signs of economic weakness that observers hoped would allow the bank to be less hawkish.

“Investors are increasingly concerned that Jerome Powell will deliver a hawkish speech in Jackson Hole, while warning that the coming months will be difficult to navigate (and fans fear a recession),” said Matthew Simpson of SoneX Financial.

“Public comments from various Fed members grew increasingly hawkish as they seemingly read the same scenario ahead of Jackson Hole – which is an event typically associated with major Fed announcements.”

Bets that the central bank will keep raising rates for some time have pushed 10-year Treasury yields higher and heightened fears of a contraction in the world’s biggest economy.

But the United States is not the only economy under pressure, with governments and banks around the world facing an uphill battle against inflation, which is at multi-decade highs due to soaring fuel costs. energy and supply chain issues.

It comes amid uncertainty due to the ongoing war in Ukraine and a sharp slowdown in China caused by lockdowns put in place as part of the country’s zero-Covid strategy.

Wall Street fell deep into the red with the S&P 500 and Nasdaq down more than 2% each.

And Asia followed suit.

Hong Kong and Shanghai fell as investors rejected a cut in lending rates by the People’s Bank of China, which also called on banks to lend more to help the struggling property market.

Tokyo, Sydney, Seoul, Singapore, Taipei, Manila and Wellington were also down.

The dollar maintained its strength on rate hike expectations, with 24-year highs against the yen and two-decade highs against the euro, having broken parity with the single currency.

The euro has been hammered for months by recession expectations as it is hit by an energy crisis caused by sanctions against Russia for its invasion of Ukraine.

Fears grew after Russia’s Gazprom said on Friday that the Nord Stream gas pipeline would be closed for maintenance at the end of the month, cutting off crucial gas supplies from Europe.

Oil prices – which have fallen for weeks as recession worries hit demand expectations – rebounded after Saudi Arabia suggested OPEC and other major producers could cut their output. production citing “volatility” in crude markets.

Such a decision would be a blow to the fight against inflation and could offset the possible flow of Iranian oil if an agreement is reached on Tehran’s nuclear program.

– Key figures around 02:30 GMT –

Tokyo – Nikkei 225: 1.2% down to 28,456.92 (pause)

Hong Kong – Hang Seng Index: DOWN 0.5% to 19,552.76

Shanghai – Composite: 0.2% down to 3,270.21

Euro/dollar: UP at $0.9942 vs. $0.9941 on Monday

Pound/dollar: UP to $1.1772 from $1.1763

Euro/pound: DOWN to 84.45 pence vs. 84.51 pence

Dollar/yen: DOWN to 137.13 yen against 137.48 yen

West Texas Intermediate: UP 0.8% to $91.11 a barrel

North Sea Brent Crude: UP 0.8% to $97.26

New York – Dow: DOWN 1.9% to 33,063.61 (closing)

London – FTSE 100: 0.2% lower at 7,533.79 (close)