European stock futures rose while Asian stocks lost gains after Chinese tech stocks tumbled from their intraday highs.
The benchmark index of Hong Kong is trading slightly lower, while US stock contracts remained unchanged. Traders and investors are awaiting the results of the quarterly reshuffle of the Hong Kong index later on Friday.
Treasury yields stabilized after fluctuating amid St. Louis Fed President James Bullard’s announcement that policymakers should raise interest rates to at least 5-5.25% to curb inflation.
The dollar stabilized and oil was poised for weekly losses on fears of worsening demand prospects.
With inflation slowly starting to come down and US retail sales figures rising quite quickly, Fed officials have been saying in recent days that they need to go further to dampen price pressures. James Bullard commented a day after San Francisco Fed President Mary Daly said that a halt in rate hikes was out of the question. The hawkish sentiment was also echoed by Minneapolis Fed President Neil Kashkari on Thursday afternoon.
Paul Christopher said markets believe inflation is on a downward trend. They also believe this, but the fact that inflation has reached its peak will not induce the Fed to reverse policy and cut rates.
On Thursday, new data showed that weekly jobless claims were better than expected, further highlighting the strength of the labor market. Mortgage rates in the US, posting their biggest weekly decline in years, briefly lifted sentiment, although chief economist Freddie Mac said the housing market has a long way to go.
If the Fed keeps increasing at the current pace, “by the time they get the information that they’ve been successful in slowing the economy and slowing inflation, it might be too late,” Ellen Hazen, chief market strategist at F.L.Putnam Investment Management. “It’s just too soon to know exactly how this is going to play through the economy and that’s the biggest risk.”
In Japan, inflation hit a 40-year high in October. Such indicators put the Bank of Japan in an even more difficult position, as it tries to explain the need to stick to monetary stimulus to ensure stable price growth.
Elsewhere, gold has risen. Bitcoin has been on track for weekly gains even as the collapse of the FTX empire continues to affect the Cryptocurrency market.
- S&P 500 futures fell 0.2% as of this morning in London. The S&P 500 fell 0.3%.
- Nasdaq 100 futures remained virtually unchanged. The Nasdaq 100 fell 0.2%.
- The Japanese Topix index remained virtually unchanged.
- The South Korean Kospi index remained virtually unchanged.
- The Hong Kong Hang Seng index fell 0.5%.
- China’s Shanghai Composite fell 0.4%.
- The Australian S&P/ASX 200 rose 0.2%.
- Futures for the Euro Stoxx 50 rose 0.6%.
- The spot dollar index changed little.
- The euro changed slightly at $1.0365.
- The Japanese yen rose 0.2% to $139.94 per dollar.
- The offshore yuan rose 0.1% to $7.1394 per dollar.
- The 10-year Treasury yield fell two basis points to 3.75%.
- The yield on 10-year Australian bonds remained virtually unchanged at 3.61%.
- West Texas Intermediate crude rose 0.5% to $82.08 a barrel.
- Spot gold rose 0.2% to $1763.36 an ounce.
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