Asian shares fall ahead of U.S. CPI, crypto worries mount

  • https://tmsnrt.rs/2zpUAr4
  • Dollar Holds Firm, Crypto Fuels Spillover Fears
  • European markets set to open lower
  • Mainland China and Hong Kong stocks battered by spike in COVID cases
  • Focus on US inflation for signs of slowing Fed rate hike

SYDNEY, Nov 10 (Reuters) – Asian stock markets fell on Thursday and the dollar held on to overnight gains ahead of the big test of a U.S. consumer inflation report, as market sentiment plunged as the likely collapse of a major crypto exchange spooked investors.

With no final results from the U.S. midterm election, investors were looking to inflation data to come later in the day, which is expected to show a slowdown in monthly and annual core numbers for October to 0. .5% and 6.5%, respectively. , according to a Reuters poll.

European markets are expected to extend the cautious mood, with pan-regional Euro Stoxx 50 futures down 0.7%. However, US S&P 500 futures edged up 0.2% while Nasdaq futures rose 0.3%.

MSCI’s broadest index of Asia-Pacific stocks outside of Japan (.MIAPJ0000PUS) fell 1.2%, led by a 1.0% drop in Chinese bluechips (.CSI300) and a 1.8% drop in the Hong Kong Hang Seng Index (.HSI).

Japan’s Nikkei (.N225) lost 1.0%.

China is once again grappling with a surge of COVID, with the southern metropolis of Guangzhou reporting thousands of cases. Apple Inc. (AAPL.O) Foxconn supplier (2317.TW) plans to update its fourth-quarter outlook on Thursday, after strict COVID restrictions remained in place at its main factory in China despite lifting a lockdown.

Elsewhere, the focus remained squarely on inflation.

“The high probability is that we see a number that is pretty much in line with expectations – that’s obviously harder to call, and we may have to wait for guidance from Fed speakers in the upcoming session to see how they perform it,” Chris said. Weston, head of research at brokerage Pepperstone.

Minneapolis Federal Reserve Chairman Neel Kashkari said Wednesday that it was “entirely premature” to discuss a potential move away from the Fed’s current policy tightening.

A slew of Fed officials, including Board Governor Christopher Waller, Bank of Philadelphia President Patrick Harker and Bank of Dallas President Lorie Logan, will speak tonight.

The futures market has currently shown investors that the Fed could return to a 50 basis point hike next month, while the target US fed funds rate could peak around 5.1% by next June.

Overnight on Wall Street, stocks ended lower as Republican gains in the midterm elections looked more modest than some had expected. Republicans were still favored to take control of the House of Representatives, but key races were too close to be called.

In the crypto world, bitcoin rose 3.6% to $16,443 on Thursday, after falling for two consecutive sessions to its lowest level since late 2020.

Binance, the world’s largest crypto exchange, said late Wednesday that it had decided not to acquire its smaller rival FTX, which has been in the grip of a severe liquidity crunch and faces bankruptcy without further notice. capital.

“You can’t deny the growing correlation between bitcoin and risky assets. FTX news is having an outsized effect on asset prices,” said Stephen Innes, managing partner at SPI Asset Management.

“Bitcoin’s fallout is not insignificant, and given the extent of holding crypto coins, this could mean more forced liquidation of other assets to cover margin calls, as long investors were overwhelmingly taken on the wrong foot.”

The U.S. dollar held onto most of its overnight gains against a basket of currencies on Thursday.

The pound gained 0.4% against the greenback at $1.1409, after falling 1.6% in the previous session.

US Treasury yields were down on Thursday.

The yield on the benchmark 10-year bond fell 8 basis points to 4.0751%, while the yield on the two-year bond fell slightly by 3 basis points to 4.5963%.

In commodities, oil prices pared earlier losses on Thursday, after falling about 3% in the previous session on fears of demand from China and rising U.S. crude inventories.

U.S. crude oil futures were flat 0.3% at $85.83 a barrel, while Brent crude oil futures stabilized at $92.71.

Gold was higher, with a spot price of $1,709.08 per ounce.

Reporting by Stella Qiu; Editing by Bradley Perrett and Sam Holmes

Our standards: The Thomson Reuters Trust Principles.

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