Friday Morning Briefing: Asian Stocks Slip, Crude Above $45-Mark
Asian stocks fell after a slump in U.S. stocks triggered by concerns around the economy's ability to withstand a tightening cycle.
Japan’s Topix index fell 0.8 percent, while the Nikkei dropped 1.1 percent on Friday morning. Stocks in South Korea, New Zealand and Australia also declined.
Despite today's losses, global equities are poised for an eighth month of gains that pushed stocks to a record high at the beginning of last week.
The yen rose 0.1 percent against the dollar, extending its gains in the last two days. The Bloomberg Dollar Spot Index, seeing losses for the last four months, is headed for a monthly loss of 1.4 percent. The pound held its gains after a seven-day rally.
Crude crossed the $45 per barrel mark, rising 0.3 percent after U.S. data showed a drop in crude production and gasoline inventories in the last weekly data report.
U.S. Volatility Surges
After nine years of an ultra-accommodative stance, the U.S. Federal Reserve is looking to hike rates further, roiling the equities, currencies and bond markets. While central banks across the globe, including the Fed, reiterated their hawkish tones, investors in U.S. remain uncertain regarding the economy’s ability to handle a tightening cycle.
Technology stocks remained under pressure while people switched to banking stocks, expecting them to benefit from higher rates. The yield on 10-year Treasuries rose four basis points to 2.27 percent on Thursday.
Investors are currently awaiting the inflation data due later in the day. Analysts expect the month-over-month PCE deflator number eased to 0.1 percent for May and the annual rate slowed to 1.4 percent.
Oil Holds Gains On Easing Supply
WTI crude prices rose 0.3 percent past the $45 dollar a barrel mark. Crude has not crossed this threshold in the past two weeks, when it last touched $46.67 on June 13.
The selloff in oil prices eased after the U.S. government data showed a decline in gasoline supplies yesterday. The supplies fell by the most in a year, last week.
OPEC and its partners don’t plan to discuss deeper cuts when they meet next month, according to the United Arab Emirates.
Oil prices are headed for the biggest monthly loss since July after prices tumbled into a bear market on concerns that rising global supply will counter output cuts from OPEC and its partners.
The Singapore traded SGX Nifty, an early indicator of Nifty 50’s performance in India, remained mostly unchanged at 9,504.
InterGlobe Aviation Ltd. will remain in focus for the day after Aditya Gosh, president and whole-time director of the company, made it clear that the country’s largest air carrier is eyeing a stake in debt-ridden Air India.