Asian stocks were mixed on Tuesday as investors await US inflation data later in the week after a jobs report suggested the Federal Reserve would likely have to continue sharp hikes in interest rates to tame runaway prices.
A rally in global markets from June lows appears to have hit buffers after Friday’s jobs forecast showed the world’s leading economy remained resilient but meant further monetary tightening was on the cards.
There was hope that recent weak data – including one showing the economy contracted for two straight quarters – would allow the bank to take its foot off the pedal to lift borrowing costs and possibly 2023 with the to begin lowering.
Investors are now excited about Wednesday’s numbers, with some observers warning that an overestimated inflation rate, already at a four-decade high, could trigger another sharp sell-off in markets.
There is a growing expectation that central bank rate hikes will go too far and plunge the global economy into recession.
Saira Malik of investment manager Nuveen told Bloomberg Television that losses could start as investors realize that “the Fed will not hike rates in early 2023, inflation will remain fairly stubborn and rate hikes should continue.”
Wall Street delivered a sad lead as tech companies took a hit after a disappointing earnings report from chip giant Nvidia was caused by lower-than-expected gaming earnings.
“Nvidia is one of those companies that is doing things right and has the majority of analysts supporting its shares,” OANDA’s Edward Moya said, adding that his “alert is a reminder to traders of the severity of the macroeconomic impact on the economy.” technology for the rest of the year could be”.
Asian stocks fluctuated in early stock markets.
Tokyo, Hong Kong, Seoul, Taipei and Manila were in the red while Shanghai, Sydney, Wellington and Jakarta rose.
Oil prices declined slightly and remain at a six-month low as recession fears mount and traders worry about the impact on demand. They are also keeping tabs on nuclear talks with Iran after the European Union presented a “final text” in talks to save a 2015 deal.
A deal could pave the way for Tehran to resume selling crude oil on international markets and help in part to plug a hole left by the ban on Russian exports following its invasion of Ukraine.
However, Moya added that “there is unlikely to be a breakthrough anytime soon. Tehran appears ready to negotiate, but an imminent decision to agree to the EU’s proposal seems unlikely.”
– Key figures at 0230 GMT –
Tokyo – Nikkei 225: down 0.9 percent at 28,009.35 (breakout)
Hong Kong – Hang Seng Index: down 0.4 percent at 19,976.74
Shanghai — Composite: up 0.3 percent to 3,245.31
Euro/Dollar: DOWN at $1.0192 from $1.0194 on Monday
Pound/dollar: DOWN at $1.2077 from $1.2079
Euro/Pound: UP at 84.39p from 84.35p
Dollar/Yen: DOWN at 134.78 yen from 134.98 yen
West Texas Intermediate: FALSE, up 0.6 percent at $90.23 a barrel
North Sea Brent Crude: FALSE, up 0.5 percent at $96.13 a barrel
New York – Dow: up 0.1 percent at 32,832.54 (close)
London – FTSE 100: up 0.6 percent at 7,482.37 (close)
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