(Bloomberg) — Equities in Asia mirrored weakness on Wall Street while Treasuries steadied following a rally after fresh data indicated labor market softness. Oil led a slump in commodity prices. (Bloomberg) — Equities in Asia mirrored weakness on Wall Street while Treasuries steadied following a rally after fresh data indicated labor market softness.
Oil led a slump in commodity prices. Equities in Japan and Australia opened lower while futures contracts for Hong Kong benchmarks also slipped. That followed a third daily decline for the S&P 500, its longest stretch of losses since October.
US futures were little changed in early Asian trading. Treasuries were mostly flat Thursday after a rally in long-dated debt in the previous session pulled the 10-year yield to 4. 1%, the lowest since August.
Short-dated US debt was also little changed in early Asian trading after the policy-sensitive two-year yield climbed slightly higher to 4. 6% Wednesday. Australian bond yields edged lower, tracking the declines in Treasuries.
The Wednesday moves partly reflected private payrolls data that fell short of estimates in a sign of softening in the employment market. That comes ahead of Friday’s US jobs report. “The slowdown in hiring continues and is becoming more obvious,” said Peter Boockvar, author of the Boock Report.
“What I’m mostly focused on right now is the trajectory of activity — and all I see is slowing in multiple places, including now the labor market. ” A key gauge for prices of raw materials tumbled to the lowest level since August 2021, paced by a slump in oil and natural gas prices. Oil held a five-day run of losses that drove prices to the lowest level since June on signs that global supplies are eclipsing demand despite plans by OPEC+ to rein in its production into 2024.
In Asia, investors braced for the fallout from Moody’s Investors Service cutting its outlook for eight Chinese banks to negative from stable, a day after unveiling a bearish stance on the nation’s sovereign bonds due to concern over the level of debt. An index of the dollar steadied Thursday after reaching its highest in three weeks. Currencies were otherwise muted during Asian trading hours.
Fed policymakers meet next week for the last time in 2023. While no change is expected in their target for the federal funds rate, they are scheduled to release quarterly forecasts that could alter market-implied expectations. Those bets have been gravitating toward more easing next year in response to weaker-than-forecast economic data.
Markets fully priced six quarter-point rate cuts by the European Central Bank in 2024 earlier on Wednesday, a move that would take the key rate to 2. 5%. Although bets were pared slightly later in the day, Deutsche Bank AG helped stoke the dovish sentiment by revising its outlook to also forecast 150 basis points of cuts.
“Inflation fears are melting,” said Prashant Newnaha, a rates strategist at TD Securities. “Central banks believe they have clearly done enough and may need to cut, otherwise real rates may be too high and restrictive. ” Hedge Fund Warnings Meantime, the Bank of England stepped up warnings about hedge funds shorting US Treasury futures, saying its measure of the net position is now larger than before the “dash for cash” crisis in March 2020.
The net short position has grown to $800 billion from about $650 billion in July, the central bank said, citing calculations based on Commodity Futures Trading Commission data. That suggests a jump in the so-called basis trade, which is where investors seek to exploit price differences between futures and bonds. In corporate news, Apple Inc.
, seeking to reverse a decline in Mac and iPad sales, is preparing several new models and upgrades for early next year, according to people familiar with the situation. Advanced Micro Devices Inc. , meanwhile, is taking aim at a burgeoning market dominated by Nvidia Corp.
by unveiling new so-called accelerator chips targeting the artificial intelligence boom. Elsewhere, gold was steady after edging higher in the previous session, while bitcoin traded just below $44,000, a level not seen since June last year. Comprehensive cross-platform coverage of the U.
S. market close on Bloomberg Television, Bloomberg Radio, and YouTube with Romaine Bostick, Scarlet Fu, Carol Massar and Tim Stenovec. Source: Bloomberg Key events this week: China trade, forex reserves, Thursday Eurozone GDP, Thursday Germany industrial production, Thursday US wholesale inventories, initial jobless claims, Thursday Germany CPI, Friday Japan household spending, GDP, Friday Reserve Bank of Australia’s head of financial stability Andrea Brischetto speaks at Sydney Banking and Financial Stability conference, Friday US jobs report, University of Michigan consumer sentiment, Friday Some of the main moves in markets: Stocks S&P 500 futures were little changed as of 9:27 a.
m. Tokyo time. The S&P 500 fell 0.
4%. Nasdaq 100 futures were little changed. The Nasdaq 100 fell 0.
6% Hang Seng futures fell 0. 2% Japan’s Topix fell 0. 7% Australia’s S&P/ASX 200 fell 0.
1% Euro Stoxx 50 futures rose 0. 8% Currencies The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1. 0767 The Japanese yen rose 0.
1% to 147. 16 per dollar The offshore yuan was little changed at 7. 1728 per dollar The Australian dollar was little changed at $0.
6551 Cryptocurrencies Bitcoin was little changed at $43,837. 5 Ether fell 0. 3% to $2,241.
1 Bonds The yield on 10-year Treasuries advanced two basis points to 4. 12% Japan’s 10-year yield advanced 1. 5 basis points to 0.
660% Australia’s 10-year yield declined four basis points to 4. 24% Commodities West Texas Intermediate crude rose 0. 3% to $69.
61 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation. –With assistance from Rita Nazareth. More stories like this are available on bloomberg.
com ©2023 Bloomberg L. P. .
From: bloombergquint
URL: https://www.bqprime.com/markets/oil-sends-commodities-to-two-year-low-bonds-rally-markets-wrap
