Stocks, securities, hawk federal for high US inflation

Amidst the epidemic of corona virus disease (COVID-19), the Tokyo Stock Exchange (TSE) has been monitoring stock index prices against the US dollar and the Japanese yen exchange rate since the start of trading in 2022. Tokyo, Japan January 4, 2022. REUTERS / Issei Kato

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  • Asian Stock Exchanges:
  • China shares flat, S&P futures stable
  • Bond yields will be higher ahead of the US CPI report
  • Core inflation is rising again, confirming the central bank’s rise

Sydney, Jan. 10 (Reuters) – Major stock markets were downgraded on Monday as investors calculated another U.S. inflation, which could lead to an advance rate hike from the Federal Reserve, boosting bond yields and technical stocks.

The outbreak of corona virus cases worldwide threatens to stifle consumer spending and growth, as well as the central bank is considering shutting down cash spikes, a tough time for markets addicted to endlessly cheap money.

It traded cautiously up 0.1% on the S&P 500 futures and 0.1% on the Nasdaq futures. Both the EUROSTOXX 50 futures and the FTSE futures rose 0.2%.

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MSCI is the broadest index of Asia-Pacific equities outside Japan (.MIAPJ0000PUS) South Korea added 0.2% (.KS11) Lost 1.0%.

Chinese blue chips (.CSI 300) The recent policy relaxation by the persistent concerns over the property sector has not changed much as it has been in balance. read more

Analysts fear that Wednesday’s U.S. consumer price report will push core inflation to a five – decade high of 5.4% in March.

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Despite missing figures from the December payrolls, the unemployment rate was just 3.9% and the strength of the wages, the economy suggested, was a shortage of workers.

Analysts at NatWest Markets said: “The fact that the labor market is approaching or already creating maximum employment pressure is in line with the central bank’s growing vision.”

“This should add to speculation about the March hike, and we have pulled our expectation that the Fed’s lift-off will occur in March instead of June.”

A panel of central bank officials is expected to come out this week to present their latest thinking, including chairman Jerome Powell and Governor Lale Brinard, who are facing confirmation inquiries.

Markets changed quickly to reflect more than 70% of the potential for a 0.25% rise in March and futures risks representing at least two hikes by the end of the year.

Technology and growth stocks plummeted, while securities plummeted as investors turned to banks and energy companies.

Yields on 10-year U.S. Treasury notes peaked at 1.765% in early 2020, up 25 basis points last week on their largest activity since late 2019. The next table target is 1.95 / 1.97% area. To us

“We think the long-term increase in treasury revenues needs to be driven further,” said Nicholas Farr, an economist at the Capital Economy.

“Markets can further underestimate how much the federal financial rate will rise over the next few years, so by the end of 2023 our 10-year yield is expected to rise another 50bp to 2.25%.”

The central bank’s hawk move is likely to benefit the US dollar, however, as the payday report failed to meet the market’s high expectations.

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The dollar was at 95.764 after falling 0.5% on Friday, but the support is at 95.568.

The euro rose to $ 1.1354, close to the recent $ 1.1184 / 1.1382 trading range. The Japanese yen stood at 115.64 from its latest bearish level as the dollar faded from last week’s high of 116.34.

In commodity markets, gold was a shadow firm at $ 1,795 an ounce, but has been down to $ 1,831 since January.

Oil prices have been steady since last week due to unrest in Kazakhstan and disruptions in Libya.

Brent was up 7 cents at $ 81.82 a barrel and US crude was unchanged at $ 78.90.

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Editing Sri Navaratnam

Our standards: Thomson Reuters Trust Principles.

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