© Reuters. File photo: In the midst of a corona virus outbreak (COVID-19) outbreak, a masked man walks past a brokerage in Tokyo, Japan on March 7 into an electronic board showing the Shanghai Composite, the Nikkei code, and the Dow Jones Industrial Average.
By Wayne Cole
SYDNEY (Reuters) – Asian stocks fell on Monday and the dollar hit a two-decade high as US stock futures extended the fall on rate concerns, while tight locks in Shanghai sparked concerns about global economic growth and a recession.
“Continued tariff hikes and hawk contacts came in the wake of declining Chinese and European activity, new plans for Russian energy embargoes and continued supply pressures,” the researchers warned. Barclays (LON :).
“This creates a dark prospect of continued inflation that will force central banks to raise rates, even if it slows growth sharply.”
Chinese trade data for April was not as bad as feared, with exports up 3.9% for the year and imports equal.
However, there is no downside to China’s zero Govt policy, with Shanghai tightening city-wide COVID locks for 25 million residents.
Speculation that Russian President Vladimir Putin might declare war on Ukraine to summon reserves during his speech at “Victory Day” celebrations also hurt market sentiment. Putin has so far classified Russia’s operations in Ukraine as “special military action”, not a war.
The stock futures led with a 1.1% fall, while the Nasdaq futures fell 1.0%. US 10-year bond yields hit a new high of 3.15%.
EUROSTOXX 50 futures fell 1.5% and futures fell 0.7%.
Outside Japan, broad-based MSCI stocks of Asia-Pacific stocks fell 1.3% and 2.4%, respectively. Chinese blue chips fell 0.8% and the yuan touched another 18-month low of 6,7049 against the dollar.
Investors were tense ahead of the US consumer price report on Wednesday, where only a slight easing in inflation was forecast and there was nothing to stop the Federal Reserve from rising to at least 50 basis points in June.
Core inflation actually stood at 0.4% in April, up from 0.3% in the previous month, although the annual pace slowed slightly due to the core effects.
“In Q1, the annual monthly change in core CPI was 5.6%,” said analysts at ANZ. “This is very high for the central bank and we think the FOMC will not ease inflation until the core number is moderate to 0.2% m / m on a constant basis.
“The central bank is not the only central bank facing inflationary pressures. Increasingly, the ECB’s guidance is becoming worse.”
The price of Fed Fund futures will be 1.75-2.0% in July, up from the current 0.75-1.0%, to 3% by the end of the year.
This week the diary is filled with Fed speakers, which will give them plenty of opportunity to continue the hockey chorus.
The Aggression Ratio Outlook The US dollar was 104.080 in the basket of 20-year highs majors.
“Risk appetite is fragile and yield spreads suggest a further reversal in the dollar index,” said Sean Gallo, Westback’s senior FX strategist.
“We anticipate the current demand for DXY. 104 has already been explored and 107 has the potential to run towards multi-week.”
The euro was hovering above $ 1.0510 and its recent low of $ 1.0481, with the dollar controlling the most against the Japanese yen at 131.07.
Oil prices fell on Sunday after the Group of Seven (G7) countries promised to ban or gradually suspend Russian oil imports.
After an early fall, the last 12 cents were added to $ 112.51 and 4 cents to $ 109.81.
Gold was idle at $ 1,872 an ounce, recently struggling to find any traction as a safe haven
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