Wall Street extended losses as the global bond yields jumped for the second straight trading day after the US reported much stronger-than-expected employment data last Friday, sparking new concerns that the Fed may be far away from a pivot. The CME Fed WatchTool is now pricing for two more hikes of 25 basis points in both March and May as odds for a longer rate hike cycle have been strengthened compared toast week when it saw a pause after March. The US 2-year bond yield rose 15 basis points to 4.45%, the highest in one month, sending broad equity markets down and pushing the US dollar index higher for the third consecutive trading day, while both gold and oil prices climbed higher as commodity market tried to rebound from a sharp selloff in the last two sessions. Decide rates
The Reserve Bank of Australia is expected to raise interest by 25 basis points and bring its official cash rate to 3.35% amid sticky inflation. But the bank may stay dovish at the back of a jump in the unemployment rate and a sharp decline in retail sales in the recent month.
Equity futures point to a mixed open across the APAC region, with ASX futures up 0.01%, Nikkei 225 futures flat and Hang Seng Index up 0.08%.Click to enlarge the table
- The rally in tech lost steam amid disappointing earnings of Apple, Amazon and Alphabet, dragging on Nasdaq. 10 out of the 11 sectors in the S&P 5finisheding lower, with both Technology and Communication Services leading losses, down 1.4%. The utility is the only sector that closed in green as defensive stocks outperformed amid risk-off sentiment.
- Google announces announced an OpenAI-alike chatbot called “Bard” amid rising competition in the ChatGPT-centredred technology. This is the third big tech company that adopts the technology which allows users to get conversation-style search results, following Microsoft’s 10 million investment plan for OpenAI, and Baidu’s development into a similar area.
- Meme stocks jumped despite a broad decline on Wall Street, with Bed Bath & Beyond’s shares surging 92%, AMC Entertainment up 11% and GameStop up 7%.
- Gold futures stabilized above 1,860 after a sharp retreat in the last two trading days due to a rebound in the US dollar and the US bond yields. But the precious metal still faces downward pressure, with a further potential support of 1,846.
- Crude oil prices rebounded from a one-month low as traders may reassess the demand outlook after a week-long drop. A jump in the bond yield and a decline in equity markets may have caused hedging trades too.