Chinese stock market leads Asia’s decline, gold falls after record high
Traders are hesitant to place big bets ahead of Federal Reserve Chairman Jerome Powell’s congressional testimony, which will be analyzed to gauge whether the U.S. central bank is ready to start cutting interest rates.
MSCI’s largest index of Asia-Pacific stocks outside Japan fell 0.21%. Japan’s Nikkei index fell 0.20% as investors took some profits after reaching record highs this week.
Chinese stocks fell a day after the country set a widely expected 5% growth target for 2024 at a parliamentary meeting without major stimulus measures.
The blue-chip CSI 300 index fell 0.42%, while Hong Kong’s benchmark Hang Seng index rose 0.73%.
“The 2024 economic target still shows officials are unwilling to quickly rebalance the economy due to concerns about excessive debt and a weak yuan,” said Mansour Mohiuddin, chief economist at the Bank of Singapore. “However, this report is a signal that policymakers are stepping up efforts to curb China’s growth, which should therefore support investor sentiment in 2024.” Overnight, Wall Street’s three main indexes retreated more than 1%, with weakness in big growth companies such as Apple and the chip sector weighing the most on the tech-heavy Nasdaq. (.N)
E-mini futures for the S&P 500 rose 0.01%.
Data on Tuesday showed expansion in the U.S. services sector slowing and new factory orders fell sharper than expected, putting firm focus on payroll data later in the week.
Benchmark 10-year US Treasury yields were steady during Asian hours, last at 4.162%, after falling to a one-month low of 4.112% in the previous session due to weak data.
Traders are scouring U.S. economic data and speeches from policymakers to gauge when the Federal Reserve will begin cutting interest rates. According to the CME FedWatch tool, the market has a 68% chance that the Fed will begin its easing cycle in June. They have priced a cut of 88 basis points this year.
That makes Powell’s appearance Wednesday a significant event, but analysts expect the Fed chairman to stick to his message.
“It is unlikely that Chairman Powell and his colleagues will change their recent message that they are in no rush to cut interest rates and want more assurance that inflation has been tamed,” ING economists said.
In currency markets, the Japanese yen rose 0.05% to 149.99 per dollar, while the euro was last buying $1.0846 ahead of the European Central Bank’s policy decision on Thursday.
The ECB is widely expected to keep interest rates unchanged at a record 4% level, but stubborn inflation will focus on clues as to when interest rates will start to fall.
Last week’s data showed euro zone inflation fell in February but underlying inflation remained high, suggesting the ECB may need to keep interest rates at record highs for a little longer before starting to ease policy mid-year. Added.
Markets are pricing in a 90bp cut from the ECB this year.
In the cryptocurrency world, Bitcoin closed at $63,436, having surpassed its previous session’s high of $69,202.
Spot gold fell 0.1% to $2,125.36 an ounce after hitting a record high of $2,141.59 on Tuesday. (goal/)
On this day, U.S. crude oil fell 0.1% to $78.07 per barrel, and Brent crude oil fell 0.13% to $81.93. (or)
