Saturday May 28, 2022

Asian Stocks Down, U.S. and China Will Meet to Discuss Ukraine By

© Reuters.

By Gina Lee – Asia Pacific stocks were mostly down on Monday morning. Inflation risks from commodity-supply disruptions continue, with the US Federal Reserve widely expected to hike interest rates in its latest .

Japan’s gained 0.57% by 10:37 PM ET (2:37 AM GMT) while South Korea’s fell 0.96%.

In Australia, the jumped 1.13%.

Hong Kong’s slid 3.16%. China’s fell 0.78% and the was down 0.71%.

The Nasdaq Golden Dragon China Index sank 10% during the previous week, which dampened the mood in Hong Kong alongside the persistently high number of cases in the city’s fifth wave of COVID-19. China is also dealing with a growing outbreak which put the southern city of Shenzhen under a lockdown.

READ  U.S. sends Patriot missiles to Saudi Arabia despite deteriorating relations

Chinese data, including , , , and the , is due on Tuesday.

Global shares eased a selloff driven by Russia’s invasion of Ukraine on Feb. 24. continue, with senior US and China officials to meet on Monday for discussions.

However, Russian missiles hit a military training facility in Western Ukraine close to Poland and US officials claimed that Russia asked China for military equipment. With Russia losing access to almost half of its foreign exchange reserves, it remains to be seen if the country can continue to service its international debt.

US Treasuries extended a downward trend, with the five-year US yield above 2% for the first time since May 2019. This, and a 12% drop in global stocks this year, continue to drive concerns that tighten monetary policy and soaring energy, grain, and metal costs could slow down the economic recovery.

READ  Retired and bored or -- worse yet -- boring? Try this

“We are experiencing extraordinary volatility in global equities compounded by wavering market sentiment, and the risk of recession intensifies on spiraling commodity prices,” Federated Hermes (NYSE:) portfolio manager for global equities Louise Dudley said in a note.

“We expect ongoing swings in the short term as geopolitical uncertainty over Russian crude persists.”

Investors now await the Fed’s policy decision, due to be handed down on Wednesday. However, the central bank “is really stuck between the real economy and the financial economy,” Bain & Co. global head of macro research Karen Harris told Bloomberg.

“You have mainstream struggling with inflation, that’s why we are set to see these rises coming in March. On the other side, we are trying not to prick the financial economy. Either path is deflationary, recessionary.”

READ  European stocks rally as Ukraine's president cools to NATO membership

The will hand down its policy decision on Thursday, with European Central Bank President Christine Lagarde, Executive Board member Isabel Schnabel, Governing Council member Ignazio Visco, and Chief Economist Philip Lane speaking at a conference on the same day.

In Asia Pacific, the Reserve Bank of Australia will release the on Tuesday, while the will hand down its policy decision on Friday.

Source link

Leave a Reply

Your email address will not be published.