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Asian equities restrained on U.S. futures withdrawal – SABC News

Asian equities started slowly on Tuesday after an early decline in U.S. futures on the Wall Street rally worsened, while the euro was close to a one-month high as the chances of an ECB rate hike in July diminished.

Nasdaq futures lost 1.3% after Monday’s strength, and traders blamed Snap’s earnings warning, causing the shares of Snapchat owner to fall 28%. The S&P 500 futures quote also lost 0.6%, waiving Monday’s 1.8% rebound.

As a result, MSCI’s broadest Asia-Pacific stock index remained virtually unchanged, while Japan’s Nikkei fell 0.1%.

Markets have received some consolation from U.S. President Joe Biden’s remark that he is considering easing sanctions on China, as well as Beijing’s promises of continued recovery.

Unfortunately, China’s zero-COVID policy has already caused significant economic damage with the shortfalls that come with it.

“After disappointing April activity data, we have again downgraded our forecast for China’s GDP (gross domestic product) and we now expect 2Q GDP to decline by 5.4% year on year, up from 1.5%.” warned JP Morgan analysts. “Our second-quarter global growth forecast is just 0.6% year-on-year, easily the weakest quarter since the global financial crisis outside of 2020.”

Early May surveys of European and U.S. manufacturing purchasing managers will be released late Tuesday and may show some slowdown in the resilient sector of the global economy.

Analysts have also cut forecasts for the U.S. as the Federal Reserve looks confident it will raise interest rates by a full percentage point over the next two months.

It is likely that this week the army of Fed speakers and the minutes of Wednesday’s last political meeting will take home the hawk message.

Nevertheless, the European Central Bank is also becoming more salivating, and President Christine Lagarde has surprised many by opening the door to an interest rate hike as early as July.

With this, the euro strengthened to $ 1.0685, bouncing 1.2% overnight at the best rate since early March.

It now faces rigid chart resistance around $ 1.0756.

The dollar also fell against the pound and a range of currencies, bringing the dollar index down 0.9% overnight and then falling to 102,100.

Meanwhile, the euro jumped sharply to 136.56 Japanese yen, while the dollar held 127.77 yen.

The withdrawal of the dollar helped gold regain its place at $ 1,853 an ounce.

Oil prices were among concerns about a possible global downturn and higher fuel demand due to the U.S. summer driving season, as well as a reopening plan after Shanghai’s two-month corona virus shortage.

U.S. crude fell 59 cents to $ 109.70, while Brent fell 60 cents to $ 112.82.

Asian equities restrained on U.S. futures withdrawal – SABC News

Source link Asian equities restrained on U.S. futures withdrawal – SABC News

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