Asian Stock Market: Grinds lower amid firmer Treasury yields, China headlines
|- Asian equities trade mixed, mostly heavy, amid US bond selling.
- Xi-Biden talks have a lot to follow up, US Commerce Secretary alleges China not respecting trade deal terms.
- Aussie Wage Price Index renew RBA rate hike expectations, US data keeps Fed action needs in focus.
- US Treasury yields refresh three-week top, DXY rising to the highest since July 2020.
Asian investors struggle for clear direction as firmer US Treasury yields and mixed updates concerning China probe bulls heading into Wednesday’s European session. That said, the MSCI’s index of Asia-Pacific shares outside Japan drops 0.40% whereas Japan’s Nikkei 225 replicates the move by the press time.
Markets in Japan remain depressed even as the government pushed back talks over capital gain tax to the next year. The reason could be linked to the mixed trade numbers and ongoing talks over the US steel and aluminium tariffs. “Japanese trade and industry minister Koichi Hagiuda and U.S. Trade Representative Katherine Tai held talks in Tokyo on Wednesday over extra tariffs on Japan's exports of steel and aluminum to the United States imposed by former President Donald Trump,” said Kyodo News.
On a different page, US President Joe Biden signaled that they have a lot to follow up on despite having a “good meeting” with China’s Xi. The same join comments from US Commerce Secretary Gina Raimondo who said, per Bloomberg, “China is not living up to its commitments in the phase one trade deal.”
The absence of positives concerning China and strong US Treasury yields not only weigh on stock from China, Hong Kong and South Korea but also challenge investors in Australia and New Zealand.
It’s worth noting that Australia’s Wage Price Index matched the upbeat forecast for Q3 and renewed RBA rate hike call, dragging down the ASX 200 by 1.0% at the latest.
Elsewhere, New Zealand Prime Minister Jacinda Ardern’s unlock announcement failed to impress Kiwi bulls as RBNZ rate hikes gain more attention ahead of the next week’s monetary policy meeting.
It should be noted that Indonesia and India manage to battle the bears amid covid-linked good news at home.
On a broader front US 10-year Treasury yields renew three-week high whereas the US Dollar Index (DXY) jumps to the highest since July 2020 to weigh on the Asia-Pacific equities. Behind the moves could be the fresh Fed rate hike chatters backed by the strong US Retail Sales for October.
Read: US 10-year Treasury yields wobble at three-week top on mixed clues
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