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On Monday, the U.S. central bank’s stance on inflation deepened in Asia, triggering a sell-off and global stock markets fell.
Japan’s Topix Index fell 2.6% in early trading in the region, while Australia’s S&P/ASX 200 Index fell 1.9%. Hong Kong’s Hang Seng Index fell 1.4%, and South Korea’s Composite Index fell 1.1%.
Those that fell follow Worst week The stock benchmark of the Wall Street S&P 500 Index in the past four months.The sell-off was triggered by comments by Fed Chairman Jay Powell on Wednesday transmit signal The central bank may raise interest rates sooner than investors thought to curb inflation, rather than maintaining supportive policies indefinitely.
This sudden shift has allowed investors to flee from stocks favored in so-called “reinflation trading”, or stocks that benefit from high inflation, which has been dominating the market since the launch of the Covid-19 vaccination campaign at the end of last year .
S&P 500 index futures fell 0.5% in Asian trading on Monday, while London’s FTSE 100 index futures fell 0.8%. The Standard & Poor’s 500 Index fell 1.3% on Friday.
St. Louis Fed President James Brad’s remarks also dampened market sentiment, saying that if inflation is higher than expected, the United States may raise interest rates as early as the end of 2022. The Fed also said last week that it will soon start discussing when to reduce its monthly bond purchases of $120 billion.
Robert Carnell, head of research at ING Asia Pacific, said: “This looks like a market overinvesting in the Fed’s previous story, which may be too literal.” “When a more reasonable version of future events is disclosed to the central bank. At this time, the central bank seems unable to control the actual shocks that hit the market.”
Mansoor Mohi-uddin, chief economist at the Bank of Singapore, added: “Unexpected investors may further reduce deflationary transactions in the short term.” “But falling inflation expectations will only allow the Fed to scale back in 2022 and help market sentiment. Recovery in the summer.”
In terms of bonds, the 30-year US Treasury yield fell by 0.02 percentage points to 1.99% on Monday, which was the first time since February that it fell below 2%, due to increased pressure on trading due to inflation.
Commodity prices stabilized after falling sharply last week. The international oil benchmark Brent crude oil rose 0.4% to US$73.82 per barrel. US market trader West Texas Intermediate rose 0.5% to $72.03.
In China, the CSI 300 Index fell 0.6% after banks kept the best lending rate for China’s benchmark loans unchanged. Lenders benchmark new loans based on interest rates.
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