--- title: "Asian shares decline as bonds extend selloff: markets wrap" description: "Asian equities declined for a second day along with bonds, as traders consider cooling expectations of Federal Reserve rate cuts for the rest of the year." type: "NewsArticle" publisher: "Daily Maverick" site: "https://www.dailymaverick.co.za" section: "Business Maverick" author: "Bloomberg" author_url: "https://www.dailymaverick.co.za/author/bloomberg/" canonical_url: "https://www.dailymaverick.co.za/article/2024-10-22-asian-shares-decline-as-bonds-extend-selloff-markets-wrap/" published: "2024-10-22T05:36:01" updated: "2024-10-22T05:36:03" lang: "en-ZA" word_count: 722 --- # Asian shares decline as bonds extend selloff: markets wrap > Asian equities declined for a second day along with bonds, as traders consider cooling expectations of Federal Reserve rate cuts for the rest of the year. By Bloomberg · Published 22 October 2024, 07:36 SAST · Updated 22 October 2024, 07:36 SAST ## Content The MSCI AC Asia Pacific Index fell as much as 1.1% as benchmarks in Australia and Japan declined while Chinese markets struggled to find direction. That’s after equities in the US dropped from nearly overbought levels, following a relentless advance to all-time highs. Treasuries’ 10-year yields jumped 11 basis points to 4.20% on Monday, after Federal Reserve Bank of Kansas City President Jeffrey Schmid [said](https://www.bloomberg.com/news/articles/2024-10-21/fed-s-schmid-favors-slower-pace-of-rate-cuts-amid-uncertainty) he favours a slower pace of interest-rate reductions given uncertainty about how low the US central bank should ultimately cut rates. Bonds from Australia and New Zealand [fell](https://www.bloomberg.com/news/articles/2024-10-22/bonds-are-selling-off-everywhere-as-traders-trim-rate-cut-bets). The risk of a slower rate-cut pace “would be dollar-positive and also normally a headwind for Asia equities,” said Kieran Calder, head of equity research at Union Bancaire Privee in Singapore. Several factors, including concerns over supply and better US economic data, are driving the bond selloff, Chris Weston, head of research at Pepperstone Group Ltd., wrote in a note. US election bets are also weighing on the market, with traders “front-running the risk of a ‘Red Sweep,’” he said, referring to the possibility of Republicans taking the White House and Congress. A presidential win for Donald Trump will stoke concerns that his support for looser fiscal policy and steep tariffs will deepen the federal deficit and fuel inflation, undermining Treasuries. The chances that Federal Reserve officials will leave interest rates unchanged in November are mounting as the US economy powers ahead, [according](https://www.bloomberg.com/news/articles/2024-10-21/apollo-s-slok-says-us-economic-boom-lifts-odds-of-fed-rate-pause) to Torsten Slok, chief economist at Apollo Global Management. Asia’s stock markets are set for their busiest week of listings in more than two years, offering a crucial test of demand as companies rush to raise money before the US election. Hyundai Motor India Ltd. shares are set to [start](https://www.bloomberg.com/news/articles/2024-10-22/hyundai-motor-india-set-to-debut-after-nation-s-largest-ever-ipo) trading in Mumbai on Tuesday after raising $3.3-billion in the South Asian nation’s largest-ever initial public offering. In Japan, Tokyo Metro Co.’s $2.3-billion listing is [scheduled](https://www.bloomberg.com/news/articles/2024-10-22/tokyo-metro-s-listing-to-test-appetite-for-japanese-stocks) for 23 October. “Soft US markets are not usually a good set-up for Asia, where there are also a number of IPOs this week that will test retail and institutional demand,” Calder said. Meanwhile, traders will continue to monitor [Beijing’s efforts](https://www.bloomberg.com/news/articles/2024-10-21/chinese-banks-slash-key-lending-rates-to-bolster-ailing-economy) to boost growth in its struggling economy through stimulus. Central Huijin Investment Ltd., a unit of China’s sovereign wealth fund that has at times bought equity to stabilise the stock market, [issued](https://www.bloomberg.com/news/articles/2024-10-22/china-wealth-fund-sells-record-29-billion-of-bonds-this-year) bonds that pushed its total local debt sales this year to a record. On Monday, Chinese banks cut their benchmark lending rates after easing by the central bank in September, part of a series of measures aimed at halting a housing market slump. “The real question is how much does that stimulus translate into easing financial conditions such that it creates a durable increase in demand,” Jim Caron, CIO of Morgan Stanley Investment Management Portfolio Solutions Group, said on Bloomberg TV. Japanese traders are keeping one eye on the run-up to this [coming weekend’s election](https://www.bloomberg.com/news/articles/2024-10-21/bad-polls-for-japan-s-ruling-coalition-may-cloud-boj-rate-path). Support for Prime Minister Shigeru Ishiba’s ruling coalition is continuing to soften, indicating the possibility that the vote may result in a weakened and unstable administration. The currency markets remain on tenterhooks as the yen weakened against the dollar overnight and is approaching the 151 level per dollar. #### US earnings Wall Street faces a big earnings hurdle this week, with roughly 20% of the S&P 500 companies scheduled to report, with traders gearing up for key results from Tesla Inc. to Boeing Co. and United Parcel Service Inc. The latest Bloomberg [Markets Live Pulse](https://www.bloomberg.com/news/articles/2024-10-21/strong-wall-street-earnings-will-send-s-p-500-spx-toward-6-000-survey) survey shows respondents see Corporate America’s results as more crucial for the equity market’s performance than who wins the November election or even the Federal Reserve’s policy path. Nvidia Corp. hit a record high, with the Nasdaq 100 up 0.2%. The Russell 2000 retreated 1.6%. Homebuilders tumbled. United Parcel Service sank on a sell recommendation at Barclays Plc. Boeing rallied after a tentative agreement with its workers’ union. “With the stock market as expensive as it is (especially on a price/sales basis), it is much more vulnerable than usual when these kinds of political and geopolitical issues became significant concerns in the past,” said Matt Maley at Miller Tabak. Gold [steadied](https://www.bloomberg.com/news/articles/2024-10-22/gold-xauusd-steady-near-record-high-as-traders-digest-rival-fed-views), after hitting a record high in the previous session, as traders digested Federal Reserve officials’ views on US interest rates. Oil [was](https://www.bloomberg.com/news/articles/2024-10-21/latest-oil-market-news-and-analysis-for-october-22)down moderately after rising nearly 2% on Monday amid Middle East tensions.