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Asian Stock Exchanges: Oil prices fell more than $ 3 as lockdowns spread to China Bonds are being pushed by the Fed’s excessive forecasts The yen extends the fall as the BOJ acts to stop rising yields US payroll stars in busy busy data week
SYDNEY, March 28 (Reuters) – Asian stocks fell and oil prices fell on Monday as the lockdown in Shanghai hit economic activity as the yen extended its downtrend as the Bank of Japan stood in the way of higher yields. China’s 26 million-strong financial hub has told all companies to suspend production or put people to work remotely in a two-stage lockdown for nine days. read more The spread of restrictions on the world’s largest oil importer led Brent $ 3.39 to $ 117.26, while US crude fell $ 3.41 to $ 110.49. Sign up now for FREE unlimited access to Reuters.com Register The sense of danger was fueled by hopes for progress in the Russian-Ukrainian peace talks to be held in Turkey this week, after President Volodymyr Zelenskiy said Ukraine was ready to discuss adopting a neutral regime as part of an agreement. {nL2N2VU0EH] The stock was canceled with the broadest Asia-Pacific stock index of MSCI outside Japan (.MIAPJ0000PUS) stable. The index fell 2.1% for the month, but well above the recent lows. Chinese blue chips (.CSI300) lost 0.8%. Japan’s Nikkei (.N225) lost 0.4%, but is still almost 6% more stable for the month, as the sinking yen promised to boost exporters’ profits. S&P 500 futures fell 0.3%, while Nasdaq futures fell 0.4%. EUROSTOXX 50 futures managed to add 0.3% and FTSE futures 0.2%. Wall Street has so far proved extremely resilient to a radically more aggressive Federal Reserve. Markets are pricing in eight increments for the remaining six policy meetings this year, raising the capital rate to 2.50-2.75%. Even this perspective is not aggressive enough for some. Citi last week forecast 275 basis points for a tightening this year, including half-point increases in May, June, July and September. “We expect the Fed to continue hiking until 2023, reaching the policy target range of 3.5-3.75%,” Citi analysts wrote. “Terminal interest rate risks remain upward given the upside risk to inflation.” The main data item this week will be US wages on Friday, when another steady increase of 475,000 is expected with the unemployment rate reaching the new low after the pandemic at 3.7%. A number of global manufacturing surveys and inflation readings are also expected in the US and EU. “US data will help shape expectations if the tightening of financial conditions begins to spread to the wider economy,” said NatWest Markets analysts. Yields on 10-year bonds rose 33 basis points last week to 71 basis points a month on 2.53%, sharply raising US mortgage rates. “The next major issue will be growing fears of a recession as the Fed accelerates growth, possibly supporting a peak in yields this summer,” NatWest warned. In the foreign exchange markets, the Japanese yen was the biggest loser, as policymakers there keep yields close to zero and high commodity prices skyrocket its import accounts. The Bank of Japan on Monday strengthened its super-loose policy by offering to buy as many bonds as it needs to keep its 10-year yields below 0.25%. This led the dollar to a six-year high of 123.16 yen, giving it a 6.9% gain for the month. Similarly, the resource-rich Australian dollar has climbed more than 10% to 92.44 yen. Even the otherwise problematic euro rose 4% against the yen this month to 134.56 yen. The single currency lost about 2.3% against the dollar over the same period, but at $ 1.0954 it is slightly higher than the recent two-year low of $ 1.0804. The yen dip kept the US dollar index at 99,098, with gains of 2.5% for the month. In commodity markets, gold fell to $ 1,947 an ounce, although it continued to rise by about 2% a month. Sign up now for FREE unlimited access to Reuters.com Register Edited by: Jacqueline Wong Our role models: The Thomson Reuters Trust Principles.
