On Friday the Asian equity index fell as mixed Federal Reserve policy signals were issued on the likely pace of interest-rate hikes, while the dollar climbed as the spotlight fell on geopolitical tension.
MSCI Inc.'s Asia-Pacific share index dropped less than 0.5% on relatively muted moves across Japan, South Korea and Australia. S&P 500, Nasdaq 100 and European futures fell after Wall Street shares posted a small gain on Thursday.
The greenback's gauge was close to a one-month high. Indonesian President Joko Widodo said that China's Xi Jinping and Russia's Vladimir Putin plan to be at the Group of 20 summit in Bali later this year. As Russia continues its war in Ukraine, it leads to a showdown with US President Joe Biden and other leaders.
Treasuries were steady and oil headed for $91 a barrel. Gold andBitcoin dropped. A $2 trillion option expiration could cause volatility later on Friday.
The latest comments from Fed officials diverged a bit, as St. Louis s James Bullard urged another 75 basis-point increase, while Kansas City s Esther George struck a more cautious tone, saying the case for hikes is strong but the pace is up for debate.
Expectations of slower monetary tightening on signs that inflation is cooling investor sentiment has boosted investor sentiment. There are still a number of hurdles for the 12% jump in world equities from June lows, not least the risk of global price pressures alongside economic slowdowns in the US and China.
While lower volatility in fixed income and equities is starting to pull people back into the market, events such as the Fed's annual symposium in Jackson Hole, Wyoming next week will help determine if that is sustainable, Nicholas Colas, co-founder of DataTrek Research, said on Bloomberg Television.
Traders will pour over the comments of Fed Chair Jerome Powell at the symposium. There is speculation that he may lean against a recent loosening of financial conditions that makes it harder to curb the cost of living.
Before that, Chinese banks will likely trim their benchmark loan prime rates Monday to help shore up the nation's economy, where a power crunch is adding to the drags from a property crisis and Covid-linked curbs.
Indonesia s president said that the nation could impose a tax on nickel exports this year. The shares of Asian producers of the metal went up.
Inflation is the most closely watched indicator in the second half. Will it come down gradually or will it stay elevated, forcing the Fed to raise rates aggressively? Have your say in the anonymous MLIV Pulse survey.
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