The MSCI Asia Pacific Index fell 0.3% as shares in Japan and Hong Kong declined, while those in South Korea and Australia posted small gains. US equity contracts inched down during Asian trading.

The S&P 500 fluctuated before ending just 0.1% higher on Tuesday, while the Cboe Volatility Index hit its lowest since January 2022, remaining below 17. Bank of America’s GFSI Market Risk Index — a gauge of global volatility across assets — also remained near the lowest level since February 2022.

“There’s not a lot of volatility because I think there’s not enough evidence of a full-blown recession, nor is there evidence of a full-blown growth track out there,” Michael Cuggino, president and portfolio manager of San Francisco-based Permanent Portfolio Family of Funds, said on Bloomberg Radio.

Two-year US yields, which are more sensitive to imminent policy moves, were little changed, hovering at 4.21%, while the rate on ten-year bonds was at 3.58%. Government bond yields in Australia and New Zealand showed small gains early.

Bank of Atlanta president Raphael Bostic told CNBC that he favours raising rates one more time and then holding them above 5% for some time to curb inflation. His St Louis counterpart James Bullard separately told Reuters that he favors getting rates into a 5.5% to 5.75% range. The benchmark currently sits between 4.75% and 5%.

Swaps pricing suggests a quarter point hike by the Fed in May, with rate cuts starting to take place in July. 

“We think that that might be too early. We think that there could be a pivot, maybe towards the end of this year, but not maybe as soon as what the market is currently pricing,” Jonathan Liang, head of investment specialists for Asia ex-Japan at JPMorgan Asset Management, said on Bloomberg Television. 

Japan’s Sumitomo Mitsui Financial Group sold yen Additional Tier 1 bonds, becoming the first major global bank to issue such debt since the collapse of Credit Suisse Group AG last month.

In another sign of easing problems in the banking sector, Western Alliance Bancorp shares surged as much as 20% in late trading after it beat earnings estimates and said deposits recovered after the collapse of three US regional banks. 

On the earnings front, Goldman Sachs Group fell as its results showed traders failed to capitalize on Wall Street’s fixed-income boom, contributing to firm-wide revenue that trailed estimates. Bank of America rose after profit beat expectations and Netflix retreated after the bell as its subscriber growth and revenue outlook missed projections.

Elsewhere in markets, Bitcoin held slightly above the closely watched $30,000 level. Oil ticked higher as the bullish impetus from OPEC+ production cuts faded against a backdrop of weaker-than-expected demand. Gold was flat after halting a two-day losing streak on Tuesday. BM/DM