Stocks fall on Chinese NPC disappointment, Bitcoin nears record
Stocks around the rest of the world also fell after retreating from record highs on Wall Street overnight on signs the U.S. Federal Reserve is in no rush to cut interest rates. U.S. stock market futures also showed a downward trend.
Bitcoin continued to rise to a two-year high of $68,650.87, putting it close to its all-time high. Gold hit an all-time high of $2,114.99 on Monday and remained there in recent sessions.
Japan’s Nikkei index fell 0.59% after hitting a record high on Monday, while MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.4%.
Chinese blue chips fell 0.2%, and Hong Kong’s Hang Seng Index fell 1.3%.
“China aims to lower its fiscal budget from a gap of around 3.8% to 3% of GDP in 2023, suggesting that large-scale fiscal stimulus is not currently possible,” said James Kniveton, senior corporate FX dealer at Convera. “Stability remains the most important factor in Chinese policymaking, and the announcements so far appear to be consistent with that philosophy.” Meanwhile, alternative assets such as cryptocurrencies and gold bullion received support and stocks sold off following Atlanta Federal Reserve President Rafael Bostic’s hawkish comments that there was no urgency to cut interest rates while inflation risks exceeded the central bank’s 2% target. It is done.
The comments struck a nerve as they come ahead of Federal Reserve Chairman Jerome Powell’s semi-annual testimony to Congress later this week and a deluge of key data on prices and jobs, culminating in Friday’s nonfarm payrolls report.
“We are seeing signs of a bit of an irrational boom in some markets, particularly Bitcoin and gold, and long-standing short selling may be winding down,” said Kyle Rodda, senior market analyst at Capital.com.
“This move was achieved despite only minor changes in interest rate market pricing.”
The odds of a U.S. interest rate cut at the May meeting have fallen to less than 22% from 26% a day earlier, according to CME Group’s FedWatch Tool.
The dollar index, which measures the currency against a basket of six major peers, was last flat at 103.83. It fell 0.07% on Monday as declines against rivals including the euro and pound overshadowed gains against the yen.
The euro was little changed at $1.08525 after rising 0.14% on Monday, and the European Central Bank is expected to set policy on Thursday.
Sterling was steady at $1.26895 after rising 0.3% earlier this week ahead of the U.K. budget on Wednesday.
Against the yen, the dollar fell 0.07% to 150.41, giving up slightly from Monday’s 0.27% gain. The currency pair tends to be very sensitive to movements in long-term US bonds, with the benchmark 10-year Treasury yield rebounding from a two-and-a-half-week low overnight to reach 4.217% as of Asian time on Tuesday.
Elsewhere, crude oil prices continued to slide on Tuesday as demand headwinds offset a widely expected extension of OPEC+ producers’ voluntary production cuts until mid-year. (or)
Brent crude futures fell 11 cents to $82.69 per barrel, while U.S. West Texas Intermediate (WTI) crude futures fell 19 cents to $78.55 per barrel.
