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Hong Kong, (UrduPoint / Pakistan Point News – 13th Feb, 2023 ) :Asian stocks fell again on Monday on growing expectations that US interest rates will be much higher and longer than before.
While inflation has been trending lower for several months, data showing that the job market remained very tight in January suggests that the world’s top economy remains resilient.
The employment reading prompted a number of Federal Reserve officials to insist that more work needs to be done before they are happy that rates are under control.
Tuesday’s release of the US consumer price index for January is in the spotlight, with a stronger-than-forecast reading likely to dampen sentiment.
Stephen Innes, of SPI Asset Management, said: “The surprise move could be through risk assets like a wrecking ball after the latest drop in inflation readings has created a fresh optimism among investors for a ‘soft landing’.”
Asian markets struggled after Wall Street suffered its worst week in two months.
Hong Kong, Tokyo, Seoul, Singapore, Sydney, Taipei and Wellington were all in the red, although Shanghai made small gains.
“The yield curve (government bonds), the drop in PMI surveys and the sharp drop in publicly announced corporate layoffs are all traditional warning signs of a potential recession,” Innes said.
“And when taken together, perhaps even more of a warning signal that the US economy, and therefore the market, is about to bottom out.” There are fears that prices will go even higher – some even predict six percent from the current 4.50-4.
75 percent worry that the Fed will cause the economy to collapse.
Eric Robertsen, a spokesman for Standard Chartered, said: “The longer (the Federal Policy Council) is forced to extend the period of rate hikes and delay rate cuts, the more likely the US will face a hard landing and require more aggressive rate cuts later. Worries about the economic outlook weighed on oil prices after both key contracts rose more than two percent on Friday in response to Russia’s decision to cut output.
The move follows Western price restrictions imposed on exports in response to Moscow’s attack on Ukraine.
However, commodities are supported by optimism about China’s growth prospects as it emerges from post-Covid measures.
“In the short term, I suspect prices will be fairly restrained by the first-quarter surplus,” said Warren Patterson of ING Groep.
“As we approach the middle of the year, we expect the market to tighten, which should push prices up to $100.” – Key figures around 0230 GMT – Tokyo – Nikkei 225: UP 1.1% at 27,354.81 (break) Hong Kong – Hang Seng Index: DOWN 0.9% at 21,000.03 Shanghai – Composite: UP $0,354.03 at $3,260.16 dollars. on Friday Pound/Dollar: UP at $1.2052 from $1.2051 Euro/Pound: DOWN at 88.53 pence from 88.56 pence Dollar/Yen: UP at 131.67 Yen from 131.42 Yen West Texas: DOWN 0 .7 percent per barrent Sea4N: DOWN 0.7 percent per barrent Sea4N: DOWN. 0.7 percent at $85.83 a barrel New York – Dow: UP 0.5 percent at 33,869.27 (close) London – FTSE 100: DOWN 0.4 percent at 7,882.45 (close)
