Asian stocks fell on Thursday on caution about the regulatory outlook in China and an impending meeting of the Federal Reserve that may provide more clues about its approach to reducing stimulus. The dollar went up.
MSCI Inc.’s Asia-Pacific gauge broke a three-day rally, and Chinese stocks resumed a pullback amid Beijing’s crackdown on private industries. South Korea’s shares fell after a central bank rate hike that makes the nation the first major Asian economy to start emerging from record low borrowing costs.
US stock futures tumbled after the S&P 500 and Nasdaq 100 rose to records overnight. The 10-year US Treasury yield maintained an advance. Traders are looking ahead to the Jackson Hole symposium, which may offer a new perspective on how the Fed intends to reduce bond purchases.
Opinions are divided on whether President Jerome Powell’s speech at Friday’s symposium will provide clearer guidance on reducing emergency support from the Fed. While the ongoing economic rebound and high inflation add to the arguments for initiate policy standardization, the fast-spreading delta virus strain threatens a slower rate of recovery than some expected.
Powell’s “speech will likely emphasize that the economic recovery has passed the crisis and that they will soon announce that they are ready to cut back on asset purchases,” Edward Moya, Oanda’s senior market analyst, wrote in a note.
The latest US data showed that orders placed with commercial equipment factories unexpectedly stalled in July, marking a pause in a months-long capital investment buildup.
Elsewhere, crude oil fell below $ 68 a barrel, offsetting a rally this week driven by bets that demand will withstand the impact of the delta virus strain on the economic recovery. Gold fell below $ 1,800 and Bitcoin traded around $ 48,000.
Here are some events to watch this week:
- Fed officials attend Jackson Hole Economic Policy Symposium Thursday through Saturday
- US GDP, Initial Jobless Claims Thursday
- July Personal Income and Expenses in the US Friday. Investors will look at the price index for personal consumption expenditures, an inflation measure that the Fed closely monitors.
Some of the main movements in the markets:
- S&P 500 futures were down 0.2% as of 12:30 pm in Tokyo. The S&P 500 rose 0.2%
- Nasdaq 100 futures lost 0.2%. The Nasdaq 100 changed little
- Japan’s Topix Index fell 0.2%
- Australia’s S & P / ASX 200 Index fell 0.4%
- South Korea’s Kospi Index fell 0.7%
- Hong Kong’s Hang Seng Index fell 1.1%
- China’s Shanghai Composite Index fell 0.5%
- The Japanese yen was at 109.94 to the dollar, up 0.1%.
- The offshore yuan was trading at 6.4810 to the dollar.
- The Bloomberg Dollar Spot Index added 0.1%
- The euro was at $ 1.1763
- The yield on the 10-year US Treasury bonds was 1.33%.
- The yield on Australia’s 10-year bonds increased two basis points to 1.18%.
- West Texas Intermediate crude fell 0.7% to $ 67.87 a barrel
- Gold was $ 1,788.17 an ounce
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