February 8, 2023

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Stocks Dip Amid Global Rate Pressures; Oil Gains: Markets Wrap

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(Bloomberg) — Stocks in Asia edged lower as they started trading Monday after a robust US jobs report left the door open for the Federal Reserve to maintain an assertive stance on inflation and as the euro zone prepares to withdraw stimulus. Oil rose.

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Equities slipped in Japan and Australia. US contracts fluctuated after the S&P 500 retreated for an eighth week in nine. Chinese and Hong Kong shares return after a long weekend as Beijing eases Covid-19 restrictions and the US commerce chief said lifting tariffs on some goods to tame inflation made sense. The Nasdaq Golden Dragon Index of Chinese shares traded in the US was up 2% over the last two trading session last week.

Crude oil rose past $120 a barrel as shortage worries persist. Saudi Arabia raised prices for its biggest market of Asia by more than expected, and the US was considering allowing more sanctioned Iranian oil onto global markets to counter the drop in Russian supplies.

Treasury yields held onto gains after US May hiring data topped expectations. A dollar gauge dipped. The next focus is May consumer prices this week to gauge whether US inflation has peaked.

Investors are fretting that a restrictive Fed could plunge the US economy into recession. The jobs report quelled some concern that the economy is slowing too sharply, but also strengthened the view that the Fed will keep hiking rates to douse inflation. Cleveland Fed President Loretta Mester said she would back a half-point hike in September if inflation is not retreating. Market-derived odds for a third 50 basis point increase in September held steady near 85%.

“The critical issue for markets is whether inflation can be brought under control by central banks without generating a recession,” Shane Oliver, head of investment strategy and chief economist at AMP Capital, said in a note. “Shares are likely to see continued short-term volatility as central banks continue to tighten to combat high inflation, the war in…

2022-06-05 20:15:23

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