TOKYO, Nov 8 (Reuters) – Treasury yields and the dollar remained above multi-week lows on Wednesday as markets grappled with the prospect of another U.S. interest rate hike, while the Fed awaited guidance on the policy outlook. Reserve Chairman Jerome Powell was awaiting comments. ,
Crude oil fell to a three-month low after data showed a sharp rise in US stockpiles, while concerns about the Chinese economy weighed on the demand outlook.
Equities in Asia were mixed, with gains in technology stocks offset by losses in commodity stocks. Wall Street futures were slightly lower after the major three indexes led gains overnight, with the tech leader Nasdaq (.IXIC) up 0.9%.
Following a softening of key monthly jobs data late last week and an easing of the Fed’s dovish stance, expectations have been building in recent days that US policy rates have peaked and cuts could begin as early as May. However, investors remain sensitive to the possibility of more hikes amid cautious comments from Fed officials.
Fed Governor Christopher Waller said on Tuesday he would keep an eye on the economy after “alarming” third-quarter GDP data, while fellow Governor Michelle Bowman said she still expected higher rates would be needed. Powell speaks Wednesday and Thursday.
US 10-year Treasury yields were little changed at 4.5789%, a floor hit for the first time since Sept. 26, after falling to 4.484% on Friday. They reached a 16-year high of 5.021% last month.
The dollar index, which measures the currency against six major peers, was largely flat at 105.55, up from a six-week low of 104.84 hit on Monday, but well behind the high of 107.11 hit earlier this month.
“Markets are biased towards softness in U.S. growth,” said Kyle Rodda, a senior markets analyst at Capital.com, with long-term yields and the dollar falling.
He said, “The fall in oil prices is also indicating the same.” “The selloff is coming on demand fears: There’s a lot of fear about China’s recovery, but also that, after extraordinary resilience, the U.S. economy is slowing.”
Brent crude futures fell 25 cents to $81.36 a barrel on Wednesday, while US crude futures fell 35 cents to $77.02 a barrel. Both fell to their lowest since July 24 in early Asian trade.
Fall in commodity stocks amid lower energy prices was offset by rise in growth stocks amid expectations of lower borrowing costs.
An example of this was Japan’s tech-heavy Nikkei 225 (.N225), which rose 0.13%, while the broader Topix (.TOPX) fell 0.66%.
MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 0.3%, led by gains in Chinese markets after some bullish comments from the governor of the People’s Bank of China.
Hong Kong’s Hang Seng rose 0.22%, while an index of mainland blue chips (.CSI300) rose 0.1%.
Reporting by Kevin Buckland, Editing by Sri Navaratnam
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