by Stella Qiu
SYDNEY (Reuters) – Asian shares edged higher as the dollar weakened, with markets buoyed by record rate hikes by the European Central Bank and hawkish comments from the Federal Reserve become calm. The U.S. Federal Reserve chairman has stepped up bets on future aggressive policy tightening.
MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.3 percent earlier on Friday. But the index fell 1.2% on a weekly basis on the back of a series of sharp interest rate hikes by global central banks this week and expectations for more to come.
Japan’s Nikkei rose 0.3%, China’s blue chips rose 0.2%, while Hong Kong’s Hang Seng
Overnight, Wall Street’s major indexes edged higher after a heavy sell-off earlier in the week. S&P 500 futures rose 0.3%, Nasdaq futures rose 0.5%, indicating risk The improvement comes as the market stabilizes.
Federal Reserve Chairman Jerome Powell said on Thursday that the bank was “firmly committed” to controlling inflation, but that there was still hope that the bank would be free from the “very high social costs” involved in the previous fight against inflation. case do this.
“With Powell hitting back very little on market pricing, we think the FOMC will affirm market expectations. In addition, we now expect 25 bp (basis point) hike in November, although this is a close call,” analysts at said Barclays (London: BARC).
U.S. interest rate futures are already factoring in 50% probability that the Fed will increase again 50 basis points for this month’s meeting, which would raise the federal funds rate to 3.0% to 3.0049%. This is an increase from the 86% probability of a day ago.
U.S. Treasury yields edged higher on Friday, with the yield on the benchmark two-year note inching up 4 basis points to 3.5264%. The annual bond yield is 3.86%, compared to previous close 3.3284%.
across the Atlantic, European Central Bank Raised interest rates by a record 75 basis points and signaled further rate hikes to fight inflation, even as the EU economy is headed for recession There is a winter recession.
This caused euro zone government bond yields to surge and supported the euro. German two-year bond yields climbed more than 19 basis points to 1.89%, the highest value since 500, while 99 – Annual Bond Yield Rising bps to 1 .19%.,.
EUR up 0.5% to 1 Dollar. 19 and managed to stay above par with the US dollar.
The dollar fell 0.3% against a basket of major currencies.
However, it gained 2.6% against the rate-sensitive yen this week. In stark contrast to rate hikes elsewhere, the yen has been a victim of the Bank of Japan’s dovish monetary stance.
Oil prices fell early Friday, 4% weekly on fears of aggressive central bank rate hikes and China’s coronavirus outbreak – 19 restrictions will hurt demand.
U.S. crude fell 0.1% to $86 . per barrel, while Brent Crude to $86 ). per barrel.
Elsewhere, Britain’s new leader Liz Truss announced Thursday a two-year cap on soaring consumer energy bills to ease the war in Ukraine economic impact.
Gold edged higher. Spot Gold is traded at $500. 86 per ounce. [GOL/]