European stocks posted small moves and Asian shares fell as solid economic readings and higher commodities prices spurred speculation that interest rates will remain higher for longer.
The Stoxx 600 fell less than 0.1%, while futures pointed to further declines for US shares. Treasuries traded steady after the 10-year yield touched its highest level since November on Tuesday.
Shares in Taiwan Semiconductor Manufacturing Co. declined as the company evacuated factory areas following Taiwan’s strongest earthquake in 25 years, casting uncertainty over production at the world’s largest maker of advanced chips.
Global equities are struggling to build on the previous quarter’s strong gains as investors recalibrate their outlook on interest rates. Better-than-estimated data on US job openings and factory goods orders added to scepticism about the pace of Federal Reserve easing.
Traders will be focusing on remarks by Fed Chair Jerome Powell later Wednesday as well as European inflation data. More key job statistics are due at the end of the week.
“We expect the cautious risk environment to persist into this Friday’s US non-farm payroll data release as the ‘good news is bad news’ mantra continues to play out,” said Jun Rong Yeap, strategist at IG Asia Pte. “The data will play a key role in further moving the dial around market rate views.”
Swap traders are currently projecting about 65 basis points of rate reductions this year — less than the 75 basis points signalled in the Fed’s latest “dot plot” forecasts.
An index of the dollar was little changed. The yen was also flat against the greenback at around 151 per dollar, remaining around the weakest level of the year — keeping alive the possibility of official intervention to support the currency.
The yuan, meanwhile, traded close to the weak end of its onshore trading band, the latest sign that a recent slew of upbeat economic data hasn’t been enough to bolster the Chinese currency.
In commodities, oil steadied following a rally Tuesday after an industry report pointed to a drawdown in US crude inventories. Gold rose, extending its rally over the past six sessions, while Bitcoin edged above $66,000.
Source: https://finance.yahoo.com/news/stocks-asia-fall-rate-cut-223505399.html
