Employees walk past FTSE100 share price information displayed on an illuminated rotating cube in the atrium of the London Stock Exchange Group Plc's offices in London on Thursday, 2 January 2020. (Photo: Simon Dawson/Bloomberg) Shares dropped in Australia and South Korea, and opened lower in China. The picture was different in Japan, with the Topix index and the Nikkei 225 posting small gains. The S&P 500 fell 0.9% on Thursday, reversing gains of almost 1%. The Nasdaq 100 fell by a similar margin and faces its first weekly decline this year.
Treasury yields continued their climbs across the curve on Friday, after investors pushed yields on the two-year Treasury above the 10-year’s by the most since the early 1980s, a sign of flagging confidence in the economy’s ability to withstand additional Fed hikes. Australian three-year bond yields rose as much as 10 basis points as traders prepare for tighter policy from the country’s central bank.
Next week’s inflation update from the US offers a relevant potential inflection point in the Treasury yield curve, according to BMO strategists Benjamin Jeffery and Ian Lyngen. “Our expectations are that the market takes away sufficient angst regarding the prevailing inflation trend to press the inversion trade even further,” they wrote in a note.
Market pricing for US rates to peak in July inched higher as investors digested the fresh data and the drumbeat of central bankers signposting further tightening ahead. Fed Bank of Richmond president Thomas Barkin said it’s important to continue hiking to rein in inflation. His comments echoed sentiment from four Fed officials who spoke on Wednesday.
The yen fell while the dollar was broadly flat. The offshore yuan was also range-bound. Chinese inflation data showed consumer prices rose 2.1% in January from a year earlier, in line with market forecasts.
Lyft shares tumbled about 30% in after-hours trading following an earnings outlook that significantly missed analysts’ estimates as it prepares to sacrifice profits in a bid to attract riders with lower prices. In the regular session, Tesla extended a rally that has pushed the electric-vehicle maker’s stock price up about two-thirds this year. Alphabet shares fell further on concerns about its artificial intelligence chat bot unveiled earlier this month.
Bitcoin steadied a decline on Thursday that pushed the cryptocurrency down 4.8%, the biggest one-day drop since November, amid speculation about a regulatory crackdown. BM/DM