Tag: asian shares

Asia shares pause ahead of inflation feast

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian shares were taking a breather near seven-month highs on Monday as investors awaited inflation data from the United States, Japan and Europe that will help refine expectations for future rate moves.

The Federal Reserve’s favoured measure of inflation – the core personal consumption expenditures (PCE) price index – is due on Thursday and forecasts are for a rise of 0.4%.

It was not long ago investors were hoping for just a 0.2% increase but high readings on consumer and producer prices suggest the risk is for a result as high as 0.5%.

Markets have already pushed out the likely timing of a first Fed easing from May to June, which is currently priced at around a 70% probability. Futures imply a little more than three quarter-point cuts this year, compared to five at the start of the month.

There are at least 10 Fed speakers on the docket this week, and are likely to repeat their mantra of staying cautious on rates. The ISM manufacturing survey is due on Friday, as are PMIs for China.

Despite the hawkish shift, Wall Street still managed to make new highs helped by huge gains for AI diva Nvidia, which added $277 billion in market value last week.

”This may be a catalyst not only for the Street to get materially more bullish on U.S. Equities but also to see a further decoupling of stocks and yields since the Mag7 are proving to deliver on earnings expectations irrespective of the interest rate environment,” wrote analysts at JPMorgan in a note.

Early Monday, S&P 500 futures and Nasdaq futures were both trading 0.1% lower.

MSCI’s broadest index of Asia-Pacific shares outside Japan was little changed, having climbed 1.7% last week to seven-month highs.

The gains were thanks in large part to a rally in Chinese stocks, which have jumped almost 10% in as many sessions on hopes for more aggressive stimulus.

Japan’s Nikkei rose 0.5%, having climbed 1.6% last week to clear its previous record high as bulls look to test the 40,000 barrier.

INFLATION, ALL THE TIME

Figures on Japanese consumer prices are due out on Tuesday and are forecast to show core inflation slowed to 1.8% in January, the lowest since March 2022.

A soft result would add to the case against a tightening from the Bank of Japan, though policy makers seem to be counting on rising wages to justify putting an end to negative rates in either March or April.

Figures on inflation in the European Union are due on Friday, with the core again seen slowing to the lowest since early 2022 at 2.9% and bringing nearer the day when the European Central Bank might ease policy.

Markets are almost fully priced for a first cut in June, with April seen as a 36% chance.

The head of the ECB Christine Lagarde speaks later on Monday, as does the chief economist of the Bank of England.

Incidentally, the Reserve Bank of New Zealand (RBNZ) holds its first policy meeting of the year on Wednesday and there is some chance it might actually hike rates given stubborn inflation, even though the country likely slipped into recession in the fourth quarter.

The shift in Fed pricing saw Treasury yields hit a three month high last week, though bonds did managed to rally on Friday. The market faces a tough test later in the session when Treasury sells $127 billion of two- and five-year notes, with another $42 billion in seven-year paper due on Tuesday. [US/]

There is also a risk some U.S. government agencies could be shut down if Congress cannot agree on a borrowing extension by Friday.

In currency markets, higher bond yields globally have been a burden for the yen which hit multi-month lows on the euro, and a nine-year trough on the Australian and New Zealand dollars.

Early Monday, the euro sat at 162.80 yen, just off its peak of 163.45, while the dollar held at 150.50 yen and just short of its top of 150.88. [USD/]

The single currency was steady at $1.0820, having briefly been as high as $1.0889 last week.

In commodity markets, gold was a fraction softer at $2,034 an ounce, having rallied 1.4% last week.

Oil prices have drifted lower as concerns about demand, particularly from China, have outweighed risks to supply from the Middle East. [O/R]

Brent dipped 11 cents to $81.51 a barrel, while U.S. crude fell 3 cents to $76.46 per barrel.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asian stocks face headwinds after US Federal Reserve interest rate hike

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian stocks are poised for a weak start Thursday on concern turmoil in the US banking sector will squeeze lending and trigger a recession.

Australian stocks opened lower, US futures fell, while contracts for Hong Kong rose. The S&P 500 dropped on Wednesday after Federal Reserve Chair Jerome Powell threw cold water on expectations of rate cuts anytime soon. US-listed shares of Chinese companies slipped as a sign of souring risk sentiment. Japanese markets are shut for a holiday.

Australian bonds rose following gains in US Treasuries. The yen, which outperformed Group-of-10 peers on Wednesday against a broadly weaker dollar, added to gains as trading resumed in Asia. Oil extended its slump as weak demand data from the US added to concern the global economy is heading toward a recession.

Also Read:Gold prices rise as market looks for cues on Fed rate hike. Buy or wait?

In what may set the stage for more volatility, the $370 billion exchange-traded fund tracking the US equity benchmark (SPY) whipsawed in late trading as concerns over the stability of the financial system resurfaced. PacWest Bancorp plunged 60 percent in post-market trading, leading regional banks lower, after people familiar said the Beverly Hills-based lender has been weighing a range of strategic options, including a sale.

In a typical choppy Fed Day of trading, US equities rallied after the Fed raised rates by a quarter-point as economists forecast and hinted at a possible pause in the most aggressive hiking cycle since the 1980s. However, equities turned lower later as Powell said there won’t be any rate cuts if the inflation rate remains too high. Treasuries rose and the dollar fell.

“Potential Fed pause, but no Fed pivot yet,” said Jason Pride at Glenmede. “The Fed is telegraphing that additional monetary tightening may or may not occur, but rate cuts do not yet appear to be on the table. The Fed’s leadership is working hard to thread the needle between telegraphing too much tightening while also not agreeing with the market’s rate cut narrative.”

The rate debate will resume again later Thursday, with the European Central Bank taking centre stage. Policymakers are seen raising the deposit rate by a quarter-point to 3.25 percent, which would mark a slowdown in their hiking cycle. The decision is expected at 2:15 p.m. in Frankfurt, followed half an hour later by President Christine Lagarde speaking at a press conference.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asian stocks mixed, Europe markets to open mixed ahead of US midterms

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian shares traded mixed in the noon, after extending gains in the early hours, on Tuesday as investors remained cautious ahead of the release of the US inflation data and mid-term elections. MSCI’s broadest index of Asia-Pacific outside Japan was flat at the last count.

At the last hour, Japan’s Nikkei 225 was up 1.3 percent, Hong Kong’s Hang Seng was down 0.4 percent. China’s Shanghai Composite was down 0.9 percent. 

Indian stock market is shut on Tuesday on account of Guru Nanak Jayanti.

European markets are set to open mixed on Tuesday  as investors globally focus on US midterm elections. FTSE futures ended 0.5 percent lower on Monday. Germany’s DAX and Italy’s FTSE MIB are expected to open higher, while France’s CAC is likely to remain unchanged from its previous close.

“The thing to watch … will be the US midterms today and the CPI data,” said Redmond Wong, Saxo Markets’ market strategist for Greater China, in a note on Tuesday. “Markets are expecting the gridlock situation of a divided Congress and moderation in the US CPI. Both are helping the risk-on sentiments.”

Wall Street ended sharply higher Monday as investors focused on Tuesday’s midterm elections that will determine control of Congress, while shares of Meta Platforms jumped on a report of job cuts at the Facebook parent.

Overnight, the Dow Jones Industrial Average rose 1.3 percent, the S&P 500 gained almost one percent and the Nasdaq Composite advanced 0.8 percent.

Also Read: China reopening hopes keep dollar on guard

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Nikkei edges lower, euro slugged due to energy crisis by Russia

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian shares slipped on Monday while the euro took a fresh spill after Russia shut a major gas pipeline to Europe, leading some governments there to announce emergency measures to ease the pain of soaring energy prices.

The euro was down 0.4 percent at $0.99 and looking likely to test its recent 20-year low of $0.90 as markets priced in more risk of a European recession.

Germany announced plans to spend 65 billion euros ($64.7 billion) on shielding customers and businesses from rising costs, while Finland and Sweden offered liquidity guarantees to keep power companies open.

Oil prices jumped along with the whole energy complex as a holiday in US markets made for thin trading conditions. News of more coronavirus lockdowns in China only added to the jittery mood.

MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.1 percent, and Japan’s Nikkei was off 0.3 percent.

Wall Street fared better as S&P 500 futures edged up 0.3 percent and Nasdaq futures 0.2 percent, though EUROSTOXX 50 futures were expected to open lower.

The energy crisis is an added complication for the European Central Bank (ECB) as it meets this week to consider how much to raise interest rates.

“Europe is faced with a dire energy outlook, with numerous anecdotes of firms cutting back production,” said Tapas Strickland, head of market economics at NAB.

“The ECB will undoubtedly decide to hike rates this week,” he added “Markets are close to fully pricing in a 75bp hike after numerous ECB officials said they were leaning that way, though there is still likely to be a debate around 50 v 75.”

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Central banks in Canada and Australia are also expected to raise interest rates this week, while Federal Reserve Chair Jerome Powell and several other policy makers will make appearances and are likely to sound hawkish on inflation.

While the August US jobs report showed some welcome signs of cooling in the labour market, investors are still leaning toward a hike of 75 basis points from the Fed this month.

The two-year US Treasury yield did fall almost 12 basis points on Friday and futures were trading flat on Monday amid general risk aversion.

The shift to safety again benefited the US dollar, which hit another two-decade high on a basket of major currencies at 110.040. The dollar was firm at 140.50 yen, just short of Friday’s 24-year top of 140.80.

Sterling was struggling at $1.14, after diving as deep as $1.14 and levels last seen in March 2020 at the start of the pandemic.

“We now expect the EUR/USD and GBP/USD rates to reach $0.90 and $1.05 respectively next year as the economic slowdown and the terms of trade shock hitting the region take their toll,” said Jonas Goltermann, a senior economist at Capital Economics.

British foreign minister Liz Truss said on Sunday she would set out immediate action in her first week in power to tackle rising energy bills and increase energy supplies if she is, as expected, appointed prime minister on Monday.

The strong dollar kept gold flat at $1,709 an ounce.

Oil prices were supported by expectations gas prices would leap in Europe later in the day.

“Ultimately, Germany would need to cut natural gas consumption by 15 percent to keep gas storage facilities from running empty,” said analysts at ANZ.” Gas rationing looks very likely, as even at 95 percent full, storage would only last 2.5 months.”

OPEC+ is meeting on Monday and is likely to keep oil output quotas unchanged for October, although some sources would not rule out a small production cut to bolster prices that have slid due to fears of an economic slowdown.

Brent was up $1.54 at $94.56, while US crude rose $1.38 to $88.25 per barrel.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asian shares continue global stock slump as Fed tightening fears flare

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian markets extended the global stock’s selloff on Wednesday, as investor worries about aggressive monetary tightening were inflamed further by strong US jobs data.

The overnight JOLTS report on job openings – closely watched by the Federal Reserve – pointed to extremely tight labour conditions, defying the Fed’s tightening efforts so far and bolstering the case to do more.

To discourage speculation about rate reductions next year, New York Fed President John Williams said on Tuesday that the central bank likely needed to get the policy rate above 3.5 percent, and was unlikely to cut rates at all in 2023.

“The strong JOLTS data and Fed rhetoric was the overwhelming narrative,” knocking stocks further and pushing up bond yields, Tapas Strickland, an analyst at National Australia Bank, wrote in a note to clients.

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“Financial conditions are a key transmission mechanism for monetary policy, and equities are part of that.”

Japan’s Nikkei sagged 0.6 percent, while Australia’s share benchmark slid 0.4 percent and South Korea’s Kospi lost 0.5 percent.

Chinese blue chips retreated 0.5 percent. Hong Kong’s Hang Seng slumped 1.8 percent, with its tech shares tumbling 2.5 percent.

MSCI’s broadest index of Asia-Pacific stocks declined 0.7 percent. Its world equity index slumped 0.9 percent on Tuesday, for a third straight day of losses.

US equity futures though pointed to some respite, with S&P 500 e-minis indicating a 0.3 percent rebound from the index’s 1.1 percent slide on Tuesday.

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Investors will now be even more attentive to the monthly US jobs report on Friday.

Earlier on Tuesday, data showed German inflation rose to its highest in almost 50 years in August, strengthening the case for the European Central Bank to also go for a super-sized rate hike next month.

Money markets currently place 68.5 percent odds of a 75 basis-point increase by the Fed on Sept. 21.

The two-year U.S. Treasury yield, which is relatively more sensitive to the monetary policy outlook, hit a fresh 15-year high at 3.497 percent overnight, but eased back to 3.4558 percent in Tokyo trading.

The 10-year Treasury yield, which hit a two-month high of 3.153 percent on Tuesday, stood at 3.1137 percent.

The dollar index, which measures the currency against six major peers, softened slightly to 108.69, after starting the week by marking a new two-decade high at 109.48.

Gold was little changed at $1,723.62, hovering near a one-month low of $1,719.56, set Monday.

Crude oil rebounded from declines of more than $5 overnight, as industry data showed US fuel stocks fell more than expected.

US West Texas Intermediate (WTI) crude futures rose 64 cents to $92.28 a barrel in early Asian trading, after sliding $5.37 in the previous session driven by recession fears.

Brent crude futures climbed 48 cents, or 0.5 percent, to $99.79 a barrel, trimming Tuesday’s $5.78 loss.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Nikkei, Kospi edges lower amid fear of rising rates, dollar in demand

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian shares got off to a rocky start on Monday while the dollar remained in demand amid concerns most major central banks are committed to raising interest rates no matter the risks to growth.

Federal Reserve Chair Jerome Powell headlines a host of policymakers at Jackson Hole later in the week and risks are he will not meet investor hopes for a dovish pivot on policy.

“We expect a reminder that more tightening is needed and there is still a lot of progress to be done on inflation, but no explicit commitment to a specific rate hike action for September,” said Jan Nevruzi, an analyst at NatWest Markets.

“For markets, a bland delivery like that could be underwhelming.”
Futures are fully priced for another hike in September with the only question being whether it will be 50 or 75 basis points, while rates are seen up at 3.5-3.75 percent by year-end.

A Reuters poll of economists forecasts the Fed will raise rates by 50 basis points in September with the risks skewed towards a higher peak.

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One exception to the tightening trend is China where the central bank is expected to trim some key lending rates on Monday by between 10 and 15 basis points.

Unease over China’s economy tipped the yuan to a three-month low last week while pressuring stocks across the region. Early Monday, MSCI’s broadest index of Asia-Pacific shares outside Japan was off 0.4 percent.

South Korea’s KOSPI shed 1.1 percent while Japan’s Nikkei fell 1.0 percent, though it has drawn support from a recent sharp reversal in the yen.

S&P 500 futures eased 0.5 percent and Nasdaq futures 0.6 percent. The S&P 500 has repeatedly failed to clear its 200-day moving average of around 4,320 and ended last week down 1.2 percent.

BofA’s latest survey of investors found most were still bearish though 88 percent did expect lower inflation over time, the highest percentage since the financial crisis.

“That helps explain this month’s rotation into equities, tech and discretionary, and out of defensives,” said BofA strategist Michael Hartnett. “Relative to history investors are still long defensives and short cyclical.”

He remained a cautious bear given rising interest rates and recommended fading further S&P rallies above 4,328.

Equity valuations were not helped by a steep rise in global bond yields last week. British 10-year yields climbed by the most in five years following a shock inflation report, while bund yields jumped on a sky-high rise in German producer prices.

Ten-year Treasury yields rose 14 basis points over the week and last stood at 2.99 percent, while the curve remained deeply inverted to reflect the risk of recession.

The general air of global uncertainty has tended to boost the US dollar as the most liquid of safe havens, sending it 2.3 percent higher last week to 108.18 on a basket of currencies last week in its best performance since April 2020.

“The USD can track above 110.00 a week if the August flash PMIs for the major economies show a further slowing in economic growth or contraction in activity,” said Joseph Capurso, head of international economics at CBA, referring to surveys of manufacturing due on Tuesday.

“We also expect Powell to deliver a hawkish message about inflation in line with recent comments from other Fed officials, supporting the USD.”

The dollar was up at 137.04 yen, having shot up 2.5 percent last week, while the euro was struggling at $1.003 after losing 2.2 percent last week.

Minutes of the European Central Bank’s last policy meeting are due this week and are likely to sound hawkish given they decided to hike by 50 basis points.

The rise in the dollar has been a setback for gold, which was pinned at $1,744 an ounce.

Oil prices were also under pressure amid worries about global demand and the high dollar. Brent was down $1.02 at $95.70, while US crude lost 99 cents to $89.78 per barrel.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asia shares mixed as China cuts rates and data disappoints

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian shares turned mixed on Monday after China’s central bank trimmed key lending rates as a raft of economic data missed forecasts, underlining the need for more stimulus to support the world’s second largest economy.

Retail sales and industrial output both rose by less than expected in July, adding to a disappointing reading on new bank lending.

The cut in rates helped cushion the blow a little and Chinese blue chips edged up 0.1 percent, while the yuan and bond yields slipped.

MSCI’s broadest index of Asia-Pacific shares outside Japan was flat, having bounced 0.9 percent last week.

Japan’s Nikkei rose 1.0 percent even though data showed the economy grew an annualised 2.2 percent in the second quarter, a touch under estimates.

Investors remain anxious to see if Wall Street can sustain its rally as hopes U.S. inflation has peaked will be tested by likely hawkish commentary from the Federal Reserve this week.

“The FOMC Minutes on Wednesday should reinforce the hawkish tones from recent Fed speakers of being nowhere near being done on rates and inflation,” warned Tapas Strickland, a director of economics at NAB.

Markets are still implying around a 50 percent chance the Fed will hike by 75 basis points in September and that rates will rise to around 3.50-3.75 percent by the end of the year.

Hopes for a soft economic landing will also get a health check from U.S. retail sales data that is expected to show a sharp slowdown in spending in July.

There is also a risk earnings from major retailers, including Walmart and Target, could be laced with warnings about a downturn in demand.

Geopolitical risks remain high with a delegation of U.S. lawmakers in Taiwan for a two-day trip.

EUROSTOXX 50 futures added 0.5 percent and FTSE futures rose 0.4 percent. S&P 500 futures and Nasdaq futures were both down around 0.2 percent after last week’s gains.

The S&P index is almost 17 percent above its mid-June lows and only 11 percent from all-time highs amid bets the worst of inflation is past, at least in the United States.

PEAK INFLATION

“The leading indicators we observe provide support for moderation with easing supply pressures, weakening demand, collapsing money supply, declining prices and falling expectations,” said analysts at BofA.

“Key components of headline inflation, including food and energy are also at an inflection point. Both Wall Street and Main Street now expect inflation to moderate.”

The bond market still seems to doubt the Fed can manufacture a soft landing, with the yield curve still deeply inverted. Two-year yields at 3.26 percent are 42 basis points above those for 10-year notes.

Those yields have underpinned the U.S. dollar, though it did slip 0.8% against a basket of currencies last week as risk sentiment improved.

The euro was holding at $1.0249, having bounced 0.8 percent last week, though it shied away from resistance around $1.0368. Against the yen, the dollar steadied at 133.33 after losing 1 percent last week.

“Our sense remains that the dollar rally will resume before too long,” argued Jonas Goltermann, a senior economist at Capital Economics.

“It will take a lot more good news on inflation before the Fed changes tack. The minutes from the last FOMC meeting and the Jackson Hole conference may well push back further against the notion that the Fed is ‘pivoting’.”

The pullback in the dollar provided something of a reprieve for gold which was up at $1,797 an ounce, having gained 1 percent last week.

Oil prices eased as China’s disappointing data added to worries about global demand for fuel. Traders were also cautious in case progress was made on a possible European-brokered nuclear deal with Iran.

Brent slipped 45 cents to $97.70, while U.S. crude fell 48 cents to $91.61 per barrel.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Nikkei, Hang Seng tech index rises as US Federal Reserve hike fear eases

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian shares extended overnight global gains thanks to strong results from regional tech firms and US retailers, while investors also took comfort from Federal Reserve minutes showing a pause to its rate hikes is on the cards later this year.

The swing in sentiment left the dollar wallowing at one-month lows, with the euro rising to its highest since April 25. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.5 percent in early trading, the biggest gain in a week, buoyed by a 1.2 percent rebound in resources-heavy Australian shares, a 2.8 percent jump in Hong Kong stocks, and a 0.7 percent rise for blue chips in mainland China. Japan’s Nikkei advanced 1.0 percent.

The Hang Seng tech index opened 4.5 percent higher, as first-quarter revenues from tech giants Alibaba and Baidu beat forecasts. The United States will not block China from growing its economy but wants it to adhere to international rules, Secretary of State Antony Blinken said on Thursday in remarks that didn’t come as a surprise to investors and political analysts.

Wall Street closed sharply higher overnight after optimistic retail earnings outlooks and waning concerns about overly aggressive interest rate hikes by the Fed encouraged buyers. The Dow Jones Industrial Average rose 1.61 percent, the S&P 500 gained 1.99 percent, and the Nasdaq Composite 2.68 percent.

Upbeat guidance from retailers such as Department store operator Macy’s Inc, discount chains Dollar General Corp, and Dollar Tree appeared to offset dour warnings from their peers in recent weeks.

“Despite the fact that the five-day gains on Wall St now at and above 4 percent suggests that the meltdown has been snapped, there should be no mistaking that this is but earnings relief and should not prematurely inspire proclamations of a bull market reboot,” said analysts at Mizuho Bank.

Tapas Strickland, a director of economics and markets at NAB, said “equities are sitting in the glow of the FOMC Minutes on Wednesday where it appears markets have interpreted them as opening up the possibility of a Fed pause in Q4 2022, while some note the front-loading of hikes may have tightened financial conditions sufficiently.”

The Fed’s minutes of its May meeting released on Wednesday confirmed two more 50-basis point hikes each in June and July, but policymakers also suggested the potential for a pause later in the year. Still, the lift in equities has not split over to other asset markets with yields broadly steady, Strickland noted.

On Friday, the yield on benchmark 10-year Treasury notes rose slightly to 2.76 percent compared with its US close of 2.75percent on Thursday. It had hit a three-year high of 3.20 percent earlier this month on fears rapid hikes from the Fed may undermine long-term growth. The two-year yield, which rises with traders’ expectations of higher Fed fund rates, touched 2.48 percent compared with a US close of 2.48 percent.

“The fall in US Treasury yields in the meantime has correlated with falls in inflation expectations, which had been above 3 percent in the 10 yr, and are now in the 2.6 percent area. All in all, a pronounced decompression of stress,” said analysts at ING in a note.

Signs that aggressive Fed action may already be slowing economic growth are also emerging. Data on Thursday showed the number of Americans filing new claims for unemployment benefits fell more than expected last week as the labor market remained tight. A separate report confirmed the US economy contracted in the first quarter.

In the currency markets, the US dollar fell 0.2 percent against a basket of major currencies, further pulling away from its 20-year peaks hit two weeks ago. The euro gained 0.26 percent against the greenback. Oil prices eased slightly in early Asian trade after surging to a two-month high in the previous session as investors focused on signs of tight global supply.

US crude dipped 0.15 percent to $113.92 a barrel. Brent crude fell 0.1 percent to $117.27 per barrel. Gold was slightly lower. Spot gold was traded at $1848.79 per ounce.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow