Asian shares fall ahead of U.S. CPI, crypto worries mount

  • Dollar remains firm, crypto fears spread
  • European markets set to open lower
  • Mainland China, Hong Kong stocks hit by wave of COVID cases
  • Focus on US inflation for signs of slowdown in Fed rate hikes

SYDNEY, Nov 10 (Reuters) – Asian stock markets pulled back on Thursday and the dollar held on to overnight gains ahead of the big test of a US consumer inflation report, while market sentiment plunged as the likely collapse of a major cryptocurrency exchanges scare investors. .

With no final results available from the US mid-term elections, investors turned to inflation data coming later in the day, which is likely to show a slowdown in both the monthly and annual core numbers for October 0.5% and 6.5%, respectively. , according to a Reuters poll.

European markets are extending the cautious mood, with pan-region Euro Stoxx 50 futures down 0.7%. However, US S & P 500 futures rose 0.2% while Nasdaq futures rose 0.3%.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell 1.2%, dragged down by a 1.0% drop in China’s bluechips (.CSI300) and a 1.8% retreat in Hong Kong’s Hang Seng index (.HSI ).

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Japan’s Nikkei (.N225) lost 1.0%.

China is again struggling with a wave of COVID, with the southern metropolis of Guangzhou reporting thousands of cases. Apple Inc ( AAPL.O ) supplier Foxconn ( 2317.TW ) plans to update its fourth-quarter outlook on Thursday, after strict COVID-19 curbs remained in place at its largest factory in China despite the lifting of a lockdown.

Elsewhere, the focus remains squarely on inflation.

“The high probability is that we see a number that is fairly in line with expectations – which is obviously more difficult to call, and we may need to wait for the advice from the Fed speaker in the previous session to see how they interpret it,” was said Chris. Weston, head of research at Pepperstone Brokerage.

Minneapolis Federal Reserve Bank President Neel Kashkari said Wednesday that it is “totally premature” to discuss any pivot away from the Fed’s current tightening policy.

A host of Fed officials including Board Governor Christopher Waller, Bank of Philadelphia President Patrick Harker, Bank of Dallas President Lorie Logan will speak tonight.

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The futures market has now shown that investors believe that the Fed could come down to a 50 basis point increase next month, while the target US federal funds rate could peak around 5.1% next June.

Overnight on Wall Street, stocks ended lower as Republican gains in the midterm elections appeared more modest than some had expected. Republicans were still favored to win control of the House of Representatives but key races were too close to call.

In the crypto world, bitcoin rose 3.6% to $16,443 on Thursday, after falling for two straight sessions to its lowest level since the end of 2020.

Binance, the world’s largest crypto exchange, said late on Wednesday that it has decided not to acquire smaller rival FTX, which has struggled with a severe liquidity crisis and faces bankruptcy without more capital.

“You can’t deny the growing correlation between bitcoin and risk assets. FTX news has a big effect on asset prices,” said Stephen Innes, managing partner at SPI Asset Management.

“Bitcoin spillovers are not negligible, and given how widely cryptocurrencies are held, it could mean more forced liquidation of other assets to cover margin calls as investors’ long positions have been found to be weak.”

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The US dollar on Thursday maintained most of the overnight gains against a basket of currencies.

Sterling gained 0.4% against the greenback at $1.1409, after falling 1.6% in the previous session.

US Treasury yields were lower on Thursday.

The yield on the benchmark 10-year note decreased 8 basis points to 4.0751% while the yield on the two-year note was 3 basis points lower at 4.5963%.

In commodities, oil prices trimmed earlier losses on Thursday, after falling around 3% in the previous session on fears of demand from China and rising US crude stocks.

US crude oil futures were flat by 0.3% at $85.83 per barrel, while Brent crude futures stabilized at $92.71.

Gold was higher, with the spot price at $1,709.08 per ounce.

Report by Stella Qiu; Edited by Bradley Perrett and Sam Holmes

Our Standards: The Thomson Reuters Trust Principles.


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