The broader equity markets across Asia are set to face another choppy day ahead as US stocks selloff intensified on Monday after a rollercoaster week. The Fed-induced recession fears continue to spook risk assets, with China reporting the slowest import figure in two years, thanks to its Covid lockdowns. Risk-off sentiment sent the broader equity markets to fresh year-lows, while EUR, JPY, and USD strengthened. Bonds rose due to the risk aversion, with the US 10-year Treasury yield falling to just above 3% from the intraday high at 3.20%.
The US April CPI data will be in focus later this week, which sets to fall. This may provide relief on the broader sentiment hopefully.
AU and NZ day ahead
SPI futures slid 1.39%, pointing to a lower open in the ASX. The NZX 50 was down 1.57% at the open. China’s weak import data and the broader selloff in the equities heavily weighed on sentiment.
US
Atlanta Federal Reserve Bank President Raphael Bostic said no need to move more aggressively than 50-basis point hikes in the next two to three meetings. However, this is not enough to convince investors that an economic recession could be avoided. Investors are awaiting other Fed officials' speaks later today.
The investment funds are in a risk-off mode, with 10 out of 11 sectors in the S&P 500 closing in red. The S&P 500 fell below 4,000 for the first time in one year. Energy and growth stocks were the biggest laggards, while defensive sectors outperformed.
Biggest laggards: Energy (-8.3%), Real Estate (-4.62), Consumer Discretionary (-4.26%), and Technology (-3.94%).
Outperformers: Consumer Staples (+0.05%), Utilities (-0.77%).
Mega Caps: Apple (- 3.35%), Microsoft (- 3.7%), Alphabet (- 2.7%), Meta Platforms (-3.71%), Amazon (-5.17%), Netflix (-4.35%), Tesla (- 9.07%), Nvidia ( -9.25%).
EU
The Europe major indices fell on an ugly China April imports data, which grows 3.9% y/y, sharply fell from 14.7% in February.
The Stoxx 50 (-2.82%), FTSE 100 (-2.32%), DAX (-2.15%), CAC 40 (-2.75%).
Commodities
Crude oil prices tumbled on the deteriorated broader sentiment, triggered by the weak Chinese economic data. The EU’s proposal to ban Russia’s oil seems hard to reach an agreement, with some members demanding exemptions. The sell-everything mood sent crude prices to the one-week lows.
WTI: $102.35 (-6.76%), Brent: $105.17 (6.37%), Natural Gas: $7.04 (-12.45%)
Precious metals fell due to a strong USD. The equity markets’ selloff spilled over into other asset classes.
Gold COMEX (Jun′22): $1,852.70 (-1.54%), Silver COMEX (Jul′22): $21.77 (-2.67%)
Algaculture commodities also fell sharply.
Wheat: $1,090 (-1.65%), Soybean: $1,587 (-2.16%), Corn: $772.5 (-1.56%).
Currencies
Risk-off sentiment sent USD, EUR, and JPY higher, while commodity currencies fell sharply on China’s slowed demands.
US dollar index: 103.7 (+0.04%)
EUR/USD: 1.0561 (+0.08%)
USD/JPY: 130.31 (-0.15%)
USD/CAD: 1.3013(+0.86%)
AUD/USD: 0.6950 (-1.85%)
NZD/USD: 0.6325 (-1.37%)
Treasuries
Bonds yields fell on mounting haven demands.
US 10-year: 3.04%, US 2-year: 2.59%.
Germany bund 10-year: 1.09%, UK gilt 10-year: 1.95%.
Australia 10-year: 3.56%, NZ 10-year: 3.79%.
Cryptocurrencies
The Crypto markets tumbled on risk-off trades. The whole market cap wiped out $14 billion, or 9.26% in the last 24 hours.
Bitcoin: $31,030 (-9.82%)
Ethereum: $2,303 (-10.30%)
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