(Reuters) – Jamie McGeever
South Korea’s interest rate decision took center stage in Asia on Thursday as broader market sentiment continued to heat up. Rising U.S. bond yields, a stronger dollar and deepening concerns about the Chinese economy have cast a shadow over us.
Inflation close to 24 is the highest in years, and the Bank of Korea is expected to raise its benchmark interest rate by 25 percentage points to 2. 24 %. A bolder move to 2.75% will put the rocket under the won and move it from this week’s –
China is going the other way. Not only did Beijing cut interest rates, Reuters exclusively reported on Wednesday that China’s foreign exchange regulator warned banks against aggressively selling the yuan.
This would be a fresh sign of official jitters about the recent weakening of the yuan. The yuan fell to a two-year low against the dollar.
Financial conditions in emerging markets are starting to tighten again as the U.S. dollar strengthens broadly – including against most Asian currencies – U.S. bond yields are steadily higher and stock markets weaken again.
-Yearly US Treasury Yield reached two-month highs of 3. 12% on Wednesday, and S&P 500‘s gains of around 0.5% were rather muted, considering a 3.5% decline over the past three sessions.
On the corporate side, Asia-focused insurance group AIA posted half-year earnings, while billionaire Gautam Adani’s conglomerate acquired nearly 30% holds shares in Media Group.
HSBC was also in the spotlight after China’s Ping An Insurance Group expressed support for restructuring the global banking giant. Ping An of China is the largest shareholder of HSBC, holding an 8.3% stake worth about US$300 million.
More direction for the market on Thursday:
Japanese producer price inflation (July)
Bank of Japan board member Nakamura speech, press conference
Korea interest rate decision