Asian stocks edge ahead of US CPI, crypto concerns grow

  • The dollar remains firm, raising fears of a cryptocurrency spread
  • European markets are set to open lower
  • Mainland China, Hong Kong stocks were hammered by a spike in COVID infections
  • Watch US inflation for signs of a slowdown in Fed rate hikes

SYDNEY, Nov 10 (Reuters) – Asian stock markets retreated on Thursday and the dollar pared overnight gains ahead of a big test of a U.S. consumer inflation report, while market sentiment spooked investors as a major cryptocurrency bourse slump. .

With no final results from the US midterm elections, investors turned to upcoming inflation data later in the day, which saw both the monthly and annual core figures for October slowing to 0.5% and 6.5%, respectively. will show. , according to a Reuters poll.

European markets are set to add to cautious sentiment, with pan-regional Euro Stoxx 50 futures down 0.7%. However, US S&P 500 futures rose 0.2% and Nasdaq futures rose 0.3%.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was down 1.2%, with China’s blue chips (.CSI300) down 1.0% and Hong Kong’s Hang Seng index (.HSI) down 1.8%.

Japan’s Nikkei (.N225) lost 1.0%.

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

Elsewhere, the focus was on inflation.

“It’s highly likely that we’re seeing a number that’s pretty much in line with expectations — that’s obviously a tougher call, and we may have to wait for guidance from Fed speakers in the coming session to see how they interpret it,” Chris said. Weston, head of research at Pepperstone brokerage.

On Wednesday, Minneapolis Federal Reserve Bank President Neel Kashkari said it was “absolutely premature” to discuss any direction away from the Fed’s current policy tightening.

A number of Fed officials will speak tonight, including Chairman Christopher Waller, Bank of Philadelphia President Patrick Harker, Bank of Dallas President Lori Logan.

The futures market is currently showing investors that they believe the Fed could cut its rate hike by 50 basis points next month, while the target US federal funds rate could peak around 5.1% by next June.

Stocks fell overnight on Wall Street as Republican gains in the midterm elections looked more modest than some had expected. Republicans were still favored to win control of the House, but the primary races were too close to call.

In the cryptocurrency world, bitcoin rose 3.6% to $16,443 on Thursday after falling to its lowest level since late 2020 for two straight sessions.

Binance, the world’s largest cryptocurrency, said late on Wednesday that it has decided not to acquire smaller rival FTX, which is struggling with a severe liquidity crunch and facing bankruptcy without more capital.

“You can’t deny the growing correlation between Bitcoin and risk assets. FTX news has a big impact on asset prices,” said Stephen Innes, managing partner at SPI Asset Management.

“Bitcoin spreads are not insignificant, and given how widely held cryptocurrencies are, it could mean more forced liquidation of other assets to cover margin calls as long investors misstep en masse.”

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

Sterling gained 0.4% against the dollar to $1.1409, after falling 1.6% in the previous session.

US Treasury yields fell on Thursday.

The benchmark 10-year note yield fell 8 basis points to 4.0751%, while the two-year note yield fell 3 basis points to 4.5963%.

Oil prices pared earlier losses on Thursday after falling around 3% in the previous session on fears of demand from China and a rise in US crude inventories.

US crude oil futures were flat 0.3% at $85.83 a barrel, while Brent crude oil futures settled at $92.71.

Gold was higher, with a spot price of $1,709.08 an ounce.

Reporting by Stella Qiu; Edited by Bradley Perrett and Sam Holmes

Our standards: Thomson Reuters Trust Principles.

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