Traders work on the floor of the New York Stock Exchange in New York on 24 February 2022. (Photo: EPA-EFE/JUSTIN LANE) An index of Asian shares rose, led by gains in Australia and South Korea after the S&P 500 closed at its highest level since mid September. Sentiment was bolstered by comments from Federal Reserve officials that signalled a willingness to slow rate hikes, and by upbeat earnings from Best Buy Co and Abercrombie & Fitch Co.
Hong Kong tech shares seesawed as investors weighed the implications of a report that Ant Group Co faces a fine of more than $1-billion from China’s central bank. The news triggered speculation that this could mark a potential end point of the government’s clampdown on tech and may allow Alibaba Group Holding Ltd to rekindle efforts to list Ant shares.
The dollar was little changed against most of its major peers. New Zealand’s currency and government bond yields climbed after the country’s central bank raised interest rates 75 basis points.
Bitcoin held recent gains after rising as much as 4.2% on Tuesday to snap the digital asset from its lowest price since November 2020.
Oil steadied as traders awaited further details of a plan to cap Russian crude prices and assessed the outlook for demand in Covid-hit China.
A rally in Treasuries pushed the benchmark 10-year yield to 3.76% on Tuesday. There will be no trading of cash Treasuries in Asia on Wednesday with Japan closed for a holiday.
US manufacturing data fell below forecasts, confirming the peak inflation narrative. San Francisco Fed president Mary Daly has said that officials need to be mindful of the lags in the transmission of policy changes, while her Cleveland counterpart Loretta Mester said she’s open to moderating the size of rate hikes.
“We think the Fed leadership wants to get off the 75-basis-point-a-meeting hamster wheel even though it is finding it hard to do so while maintaining control of financial conditions,” Evercore ISI’s Krishna Guha wrote in a note. “We think the Fed is still heading for a ‘hawkish slowing.’ And, for us at least, the slowing part is what matters.” BM/DM