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Picture: 123RF/BLUE BAY
Picture: 123RF/BLUE BAY

Asian stocks fell on Monday and US equity futures erased a climb as tightening monetary policy kept sentiment in check.

MSCI Inc’s gauge of Asia-Pacific shares hit the lowest since June 2020 amid drops in Japan and Hong Kong and mixed performance in China, where banks kept their main lending rates unchanged. 

S&P 500 contracts turned lower, while those for the Nadsaq 100 reversed a gain of more than 1%.

Bitcoin slid anew, sinking back below the closely watched $20,000 mark. A volatile crypto slump has become emblematic of the pressure on a range of assets from sharp Federal Reserve interest-rate hikes to tame high inflation.

The dollar was mixed against key peers. Crude oil added to a near-7% Friday plunge. Treasury futures advanced — there’s no cash trading as Wall Street is closed Monday for a holiday.

Markets are set to remain on edge amid elevated price pressures and concern that monetary tightening in a range of nations portends more losses.

“Data over the coming months will indeed point to the need for a greater degree of tightening, and market prices will need to adjust,” Sonal Desai, chief investment officer at Franklin Templeton Fixed Income, wrote in a note.

In the latest Fed commentary, governor Christopher Waller said he would support another 75-basis-point rate increase at the central bank’s July meeting should economic data come in as he expects.

Bank of Cleveland Fed president Loretta Mester said the risk of a US recession is increasing, adding it will take several years to return to the 2% inflation goal. Fed chair Jerome Powell is due to appear before US lawmakers this week.

Some of the main moves in markets:

Stocks

  • S&P 500 futures fell 0.1% at 3.48am. The S&P 500 rose 0.2% on Friday.
  • Nasdaq 100 futures rose 0.1%. The Nasdaq 100 rose 1.2% Friday.
  • Japan’s topix index fell 1.1%.
  • Australia’s S&P/ASX 200 index fell 0.6%.
  • South Korea’s kospi fell 2.3%.
  • Hang seng index fell 0.4%.
  • Shanghai composite index was little changed.
  • Euro Stoxx 50 futures fell 0.4%.

Currencies

  • The Bloomberg dollar spot index was steady.
  • The euro was at $1.0496.
  • The Japanese yen was at 135.07 per dollar.
  • The offshore yuan was at 6.7088 per dollar.

Bonds

  • The yield on 10-year Treasuries advanced three basis points to 3.23% Friday.
  • Australia’s 10-year bond yield fell 10 basis points to 4.04%.

Commodities

  • West Texas Intermediate crude fell 0.5% to $109.03 a barrel.
  • Gold was at $1,839.61 an ounce.

Bloomberg News. More stories like this are available on bloomberg.com

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