Asian Stocks Lead US CPI, Crypto Worries Rise

SYDNEY, Nov 10 (Reuters) – Asian equity markets were tight on Thursday and the dollar held on to overnight gains ahead of the big test of a U.S. consumer inflation report, as market sentiment plunged due to the likely collapse of a major crypto exchange. scared off investors.

With no final results available for the U.S. midterm elections, investors were looking to upcoming inflation data later today, which is expected to show monthly and annual core numbers for October falling to 0. .5% and 6.5%, respectively, according to a Reuters poll.

MSCI’s broadest index of Asia-Pacific stocks outside of Japan (.MIAPJ0000PUS) fell 0.6% in early trading, dragged down by outsized declines in Chinese bluechips (.CSI300) and the Hong Kong Hang Seng Index (.HSI).

Japan’s Nikkei (.N225) lost 1%.

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

Elsewhere, the focus remained squarely on inflation.

“While global inflation has peaked, the cooling is not significant or widespread enough to bring rate hike cycles to a convincing conclusion, in our view,” JP analysts said. Morgan.

Still, some central banks in both developed and emerging markets turned dovish on concerns that monetary tightening could lower economic growth, analysts noted.

The futures market is currently showing that investors believe the target US federal funds rate will peak around 5.1% by next June, and the odds of a 50 or 75 basis point hike are tilting in favor of a half-point increase next month.

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

In the crypto world, bitcoin recovered ground in early trading on Thursday, after falling for two consecutive sessions to its lowest level since late 2020.

Binance, the world’s largest crypto exchange, said late Wednesday that it had decided not to acquire its smaller rival FTX, which has been in the grip of a severe liquidity crunch and faces bankruptcy without further notice. capital.

“You can’t deny the growing correlation between bitcoin and risky assets. FTX news is having an outsized effect on asset prices,” said Stephen Innes, managing partner at SPI Asset Management.

“Bitcoin’s fallout is not insignificant, and given the extent of holding crypto coins, this could mean more forced liquidation of other assets to cover margin calls, as long investors were overwhelmingly taken on the wrong foot.”

The U.S. dollar held onto most of its overnight gains against a basket of currencies on Thursday.

The pound rose 0.2% against the greenback, after falling 1.6% in the previous session.

US Treasury yields were down on Thursday.

The yield on the benchmark 10-year bond fell 6 basis points to 4.0866%, while the yield on the two-year bond fell slightly by 5 basis points to 4.5732%.

On the commodities side, oil prices continued to slide on Thursday, after tumbling around 3% in the previous session on fears of Chinese demand and rising US crude inventories.

U.S. crude oil futures fell 0.3% to $85.59 a barrel, while Brent crude oil futures fell a similar margin to $92.37.

Gold was little changed, with the spot price at $1705.92 an ounce.

Reporting by Stella Qiu; Editing by Bradley Perrett

Our standards: The Thomson Reuters Trust Principles.


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