SYDNEY (Reuters) – Asian shares were trying to avoid a fourth straight session of falls on Wednesday as U.S. stock futures steadied in the wake of a pullback in large-cap tech darlings.
Holidays in Japan, China and South Korea helped cushion markets, leaving MSCI’s broadest index of Asia-Pacific shares outside Japan up 0.1%.
Japan’s Nikkei was shut, but futures recouped early losses to stand at 28,850 compared to the last cash close of 28,812.
India’s Nifty 50 started up 0.7% ahead of a speech by the country’s central bank governor, which might include policy changes to support the pandemic-stricken economy.
Nasdaq futures edged up 0.3% after a sharp fall overnight, while S&P 500 futures also added 0.3%.
The Nasdaq had dropped 1.9% on Tuesday as some big tech names ran into profit-taking, including Microsoft Corp (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL) Inc, Apple Inc (NASDAQ:AAPL) and Amazon.com Inc (NASDAQ:AMZN). (N)
Stretched valuations were tested when U.S. Treasury Secretary Janet Yellen said rate hikes may be needed to stop the economy overheating.
She later waked back the comments, but it reminded investors that rates would have to rise at some point in the future.
“Moderate inflation and a slow moving Fed would continue to be supportive, but inflation and a reactive Fed may prove to be a negative for valuations,” said Tapas Strickland, a director of economics at NAB.
“Either way yields and equities are likely to be in a dance as much better than expected economic data continues to challenge central banks’ rates guidance.”
One such challenge looms on Friday when U.S. payrolls data are forecast to show a hefty rise of 978,000, while some estimates go as high as 2.1 million.
So far, Federal Reserve Chair Jerome Powell has argued the labour market is still far short of where it needs to be to start talking of tapering asset buying.
Minneapolis Fed Bank President Neel Kashkari, a notable dove, on Tuesday said it may take a few years for the economy to get back to full employment.
The Fed’s dogged patience allowed yields on U.S. 10-year notes to ease back to 1.59%, from last week’s top of 1.69%, though the market has struggled to break below 1.53%.
Just the mention of higher U.S. rates was enough to help the dollar recoup a little of its recent losses.
The euro dropped back to $1.2020 and threatened to breach important chart support in the $1.1995/1.2000 area. A break would open the way to a retracement target at $1.1923.
The dollar held at 109.27 yen, having shied away from resistance at 109.61. Against a basket of currencies, the dollar eased a touch to 91.180, but remained some way above the recent two-month low of 90.422.
The New Zealand dollar blipped higher to $0.7173 when local jobs data proved stronger than expected.
In commodity markets, palladium soared to a record high on worries over short supplies of the metal used in emissions controlling devices in automobiles. [GOL/]
Gold was left lagging at $1,783 an ounce.
Oil prices climbed to seven-week peaks as more countries opened their borders to travellers, improving the demand outlook for petrol and jet fuel. [O/R]
Legal: CF Merchants is the trading name of Commodity and Forex Merchants registered and regulated in many Jurisdictions. CF Merchants Limited is regulated with license number 24535/2018, at Suite 305, Griffith Corporate Center, P. O. Box 1510, Beachmont, Kingstown, Saint Vincent and the Grenadines as an International Broker Company under the company act of Saint Vincent & the Grenadines. The objects of the Company are all subject matters not forbidden by International Business Companies (Amendments and Consolidation) Act, Chapter 149 of the Revised Laws of Saint Vincent and Grenadines 2009, in particular but not exclusively all commercial, financial, lending, borrowing, trading, service activities and the participation in other enterprises as well to provide brokerage, training and managed account services in currencies, commodities, indexes and leveraged financial instruments.
Commodity and Forex Merchants Limited is authorized under license number 1092420 by the Companies House, Cardiff, United Kingdom on 21st August 2017.
High Risk Investment Warning: Margin FX are leveraged products that carry an extraordinary level of risk to your funds. Trading is not suitable for everyone and may result in you losing significantly more than your investments and therefore, you should not speculate with capital that you cannot afford to lose. You should consider whether you understand how this work and whether you can afford to take the high risk of losing your money. All the trading related information on this website is general in nature and does not take into account your or your client’s personal intentions, financial conditions and needs. We encourage you to seek independent advice if necessary. It is the responsibility of the client to ascertain whether he/she is allowed to use the services of the CF Merchants based on the legal requirements in his/her country of residence. Please read full Risk Disclaimer for more details.
Regional Restrictions: CF Merchants (SV) Ltd does not provide services and accept applications from the residents of certain countries, such as United States of America, Canada, Israel, North Korea and Saint Vincent & The Grenadines. The statistics on this website is not directed at residents in any country or jurisdiction where such distribution or use would be contradictory to local law or regulation.