SINGAPORE -- Asian stock markets slipped for an eighth straight session on Wednesday, with investors bracing for a hawkish message from the Federal ReserveFederal Reserve at this week's Jackson Hole symposium.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5 percent, while Japan's Nikkei fell by the same margin. The US dollar was close to a 20-year peak on most major currencies and was just below the milestone highs on most major currencies.
Wall Street had steadily gained ground on Tuesday after two days of heavy losses, as soft US data tempered rate-hike worries, but S&P 500 futures were squeezed 0.2 percent lower in Asia, while FTSE futures and European futures fell a bit.
Late on Tuesday, Minneapolis Fed President Neel Kashkari spoke about the Fed's focus on controlling inflation ahead of all else and traders expect something similar from Fed Chair Jerome Powell who spoke from Wyoming on Friday.
It might be more sensible for Powell to come in with a flat, 'Right at the moment all we care about is getting inflation down'', said ING economist Rob Carnell.
Bond yields would rise a bit further, having the desired effect. Traders have been raising their expectations as to where the Fed funds rate might peak, with current pricing pointing toward around 3.7 percent in the middle of 2023.
Short-dated Treasury yields have been steady after climbing through August after a recent run of softer US economic news.
US services and manufacturing surveys disappointed on Tuesday and July new home sales fell to a 6 -- 1 2 year low. Two-year yields held at 3.307 percent on Wednesday and 10 year yields fell 2 basis points bps to 3.0332 percent.
The US dollar has gained a lot of support due to higher interest rate expectations and the poor comparative outlook in other parts of the world.
In Europe, benchmark gas prices have tripled in a little over two months, and a winter of unstable energy supplies from Russia is looming.
The euro is languishing because of the expected damage to growth and higher inflation. On Wednesday, it bought $0.9956 after falling as far as $0.99005 on Tuesday.
The dollar strength was pushed down on the Aussie and Kiwi, though the yen rose slightly to 136.48 per dollar.
The contract for crude oil fell below $100 a barrel, down 43 cents to $99.79 despite some doubts about Saudi supply cuts. US crude futures fell 30 cents a barrel to $93.44.
Spot gold held steady at $1,747 an ounce. The scars from a sudden slide at the end of last week are still on the wall and are parked at $21,490.