This is CNBC’s real-time blog covering Asia-Pacific markets.
Thank you for reading this post, don't forget to subscribe!All Asia-Pacific markets experienced a drop on Friday, prolonging losses from the broader selloff on Thursday.
These losses came as Jerome Powell, the Chairman of the US Federal Reserve, stated that inflation remains excessively high and will likely necessitate reduced economic growth. Additionally, the US 10-year Treasury yield has surpassed 5%.
US 10-year Treasury yield surpasses 5% for the first time since 2007
The yield on the benchmark US 10-year Treasury has exceeded 5%, marking the first time in 16 years.
The 10-year Treasury yield reached 5.001% at 5:02 p.m. ET, the first instance of it trading above that significant level since July 20, 2007, when its yield was 5.029%.
– Gina Francola, Christine Wang
While Powell acknowledged recent data showing progress in reducing prices, he also mentioned that monetary policy is still not sufficiently tight.
Investors in Asia will also evaluate Japan’s September inflation data, which registered at 3%, marking the 18th consecutive month above the Bank of Japan’s 2% objective, as well as China’s one-year and five-year loan key rates.
In Australia, the S&P/ASX 200 declined by 1.37%.
Japan’s Nikkei 225 dropped by 0.97% after the release of the inflation readings, while the Topix fell by 0.93%.
South Korea’s Kospi declined by 1.98%, while the Kosdaq decreased by 2.97%.
Hong Kong’s Hang Seng index fell by 0.77% in the first hour of trading, while China’s benchmark CSI 300 index slipped by 0.43%. China’s central bank opted not to change its benchmark lending rates in October.
During the previous night in the US, all three major indices fell due to Powell’s comments and increasing bond yields. The benchmark 10-year Treasury yield reached as high as 4.996% on Thursday, approaching the 5% level it last surpassed in 2007.
The Dow Jones Industrial Average experienced a loss of 0.75%, while the S&P 500 decreased by 0.85%. Among the indices, the Nasdaq Composite lost 0.96%.
— CNBC’s Brian Evans and Alex Haring contributed to this report.
Indonesia’s central bank aims to bolster the rupiah with an unexpected rate hike
Bank Indonesia raised interest rates on Thursday in an unexpected move aimed at curbing the depreciation of the rupiah.
On Thursday, the Indonesian rupiah fell by 0.5% against the dollar after declining nearly 2% this year.
Indonesia’s central bank raised the benchmark 7-day reverse repurchase rate by 25 basis points to 6%, its second increase this year. All economists surveyed by Reuters had anticipated that the bank would leave rates unchanged.
“Policymakers struggled to maintain currency stability in the face of global uncertainties,” said Radhika Rao, senior economist at DBS Group Research. Data Results.”
Data on inflation, trade balance, and money supply will be released prior to Bank Indonesia’s next policy meeting in November.
-Shreyashi Sanyal
China keeps benchmark lending rates unchanged in October
China decided to keep benchmark lending rates unchanged for October after the slowdown in the world’s second-largest economy displayed signs of stabilization following recent policy support.
The People’s Bank of China maintained its one-year lending prime rate, the benchmark for most household and corporate loans in China, at 3.45%. The five-year benchmark lending rate, which applies to most mortgages, was determined as 4.2%, according to a statement from the Chinese central bank on Friday.
– Clement Tan
US 10-year Treasury yield surpasses 5% for the first time since 2007
The yield on the benchmark US 10-year Treasury has exceeded 5%, marking the first time in 16 years.
The 10-year Treasury yield reached 5.001% at 5:02 p.m. ET, the first instance of it trading above that significant level since July 20, 2007, when its yield was 5.029%.
– Gina Francola, Christine Wang
Japan’s headline inflation rate drops to 3% in September
Japan’s headline inflation rate for September came in at 3%, down from the rate of 3.2% in August.
However, this reading signified the 18th straight month where inflation remained above the Bank of Japan’s 2% target.
Core inflation, which excludes fresh food prices, also declined to 2.8% from 3.1% in August.
Separately, the “core-core” inflation metric, excluding fresh food and energy prices and monitored closely by the BOJ, fell to 4.2% from 4.3% in August.
– Lim Hui Ji
CNBC Pro: These 6 global stocks are near the perilous ‘death cross’ chart pattern
Six global stocks appear to be on the verge of forming a “death cross” chart pattern, indicating potential selling pressure in the near future.
A death cross is a price chart pattern that materializes when a stock’s 50-day moving average descends below its 200-day moving average. Technical analysts view this as an indication that investors are becoming bearish on a stock or that the stock is losing momentum and will continue to decline, presenting a possible buying opportunity soon. The death cross is also used as a predictor of bear markets.
CNBC Pro subscribers can read more about these six stocks here.
-Ganesh Rao
Technical analyst states that gold appears ‘overbought in the short term’ following the recent rally
Investors interpreted the increase in gold prices as a sign that markets are risk-averse amid rising bond yields and the escalating Israel-Hamas conflict. Spot gold last traded around $1,957.39 per ounce, approximately 8% higher than its October low of $1,819.
However, Katie Stockton of Fairlead Strategies anticipates that gold will be “overbought in the short term” and might decline next week. They believe that the recent rise is merely a rebound from its previous low.
“Gold has really taken off this week,” Stockton said. “Everyone has been very quick to say that this is because the market is risk-on right now, but I disagree.”
Stockton further added, “We have to understand this in the context of what happened before this relief rally in gold, which was actually a sharp downdraft. So, gold is basically back to exactly where it was in the mid-It was till the end of September.” “So we’ve seen a round trip in the price of gold.”
– Sara Min
Pharma stocks Pfizer, Moderna among 26 new S&P 500 decliners
Pharmaceutical stocks such as Pfizer and Moderna were among the 26 S&P 500 stocks that hit fresh lows on Thursday. Illumina shares are also trading at their lowest level since December 2016.
Moreover, United Airlines last traded at its lowest level since October 2022, while Southwest Airlines was trading at a low not seen since May 2020.
Here are some other names hitting fresh lows:
– Sarah Min, Gina Francola
Stocks moved after Powell acknowledged that monetary policy has not yet tightened too much
Stocks declined after Federal Reserve Chairman Jerome Powell stated that economic policy has not yet become excessively restrictive.
The Dow and S&P 500 were both down by approximately 0.3% shortly before 12:45 p.m. ET. The Nasdaq Composite slipped by 0.4%.
– Alex Haring
Unemployment claims lower than anticipated
Initial US jobless claims for the week ending October 14 came in at 198,000, well below the Dow Jones estimate of 210,000, indicating a resilient economy despite high interest rates.
– Fred Imbert
Source: www.nbcphiladelphia.com
