Dow Today – Asia Morning Call-Global Markets | Reuters

Jan 12 (Reuters) – —————————————————————————————-

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** indicates closing price

All prices as of 18:16 GMT

EQUITIES

GLO(BA)L – U.S. stocks deepened losses on Tuesday after Federal Reserve Chairman Jerome Powell said the central bank was likely to raise interest rates this year, remarks that tempered demand for risky assets and lifted bond yields.

Benchmark 10-year Treasury yields edged up to 1.7764% on Powell’s comments, after hitting an almost two-year high above 1.8% overnight.

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NEW YORK – U.S. stock indexes fell on Tuesday ahead of Federal Reserve Chair Jerome Powell’s testimony that may offer fresh insight on policy tightening and the central bank’s plans to tackle inflation.

At 9:44 a.m. ET, the Dow Jones Industrial Average (.DJI) was down 253.81 points, or 0.70%, at 35,815.06, the S&P 500 (.SPX) was down 27.75 points, or 0.59%, at 4,642.54, and the Nasdaq Composite (.IXIC) was down 95.47 points, or 0.64%, at 14,847.36.

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LONDON – Investors venturing back into tech shares along with upbeat expectations for the fourth-quarter earnings season led European stocks to recover on Tuesday, after fears of rising rates drove heavy losses in recent sessions.

The pan-European STOXX 600 (.STOXX) closed 0.8% higher, recovering from its worst day in 1-1/2 months.

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TOKYO – Japan’s Nikkei index ended about 1% down on Tuesday, tracking Wall Street’s weak finish overnight amid caution about the U.S. Federal Reserve’s possible rate increase as soon as March, while higher Treasury yields drove a sell-off in technology shares.

The Nikkei share average (.N225) fell 0.9% to close at 28,222.48, while the broader Topix (.TOPX) slipped 0.44% to 1,986.82.

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SHANGHAI – China stocks closed lower on Tuesday as expectations of quicker U.S. Federal Reserve interest rate hikes and domestic COVID-19 outbreaks weighed on sentiment, with defence and information technology stocks leading the decline.

The blue-chip CSI300 index (.CSI300) fell 1.0% to 4,797.77, while the Shanghai Composite Index (.SSEC) lost 0.7% to 3,567.44.

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AUSTRALIA – Australian shares closed nearly 1% lower on Tuesday, led by financials, as an Omicron-led surge in COVID-19 infections in the country hovered near record levels, sending major retailers lower.

The S&P/ASX 200 index (.AXJO) ended 0.77% lower at 7390.1, extending losses for the second consecutive session. The benchmark fell 0.08% on Monday.

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SEOUL – South Korean shares ended flat on Tuesday, as cautions investors awaited Federal Reserve Chair Powell’s nomination hearing and U.S. inflation data.

The benchmark KOSPI (.KS11) closed up 0.66 points, or 0.02%, at 2,927.38, recovering from earlier losses of as much as 0.58%.

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FOREIGN EXCHANGE

NEW YORK – The dollar edged higher against a basket of currencies on Tuesday, as a bout of volatility in global financial markets kept demand for riskier currencies in check and as investors waited for Federal Reserve Chair Jerome Powell’s testimony at a U.S. Senate hearing.

The dollar index , which measures the greenback against six major peers, was up 0.06% at 95.997.

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SHANGHAI – China’s yuan edged up against the dollar on Tuesday on robust corporate demand, but traders said opportunities for a break higher are limited as expectations that the U.S. Federal Reserve will move faster to hike interest rates underpin U.S. yields.

Spot yuan opened at 6.3740 per dollar and was changing hands at 6.3706 at midday, 62 pips firmer that Monday’s late session close.

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AUSTRALIA – The Australian and New Zealand dollars were boxed-in on Tuesday as an increasingly hawkish outlook for U.S. interest rates overshadowed upbeat news on the domestic economy.

The Aussie was a shade firmer at $0.7182 , but sandwiched between support at $0.7130 and resistance around $0.7203.

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SEOUL – The Korean won strengthened, while the benchmark bond yield fell.

The won ended at 1,194.7 per dollar on the onshore settlement platform , 0.37% higher than its previous close.

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TREASURIES

NEW YORK – Short-dated U.S. Treasury yields hit almost two-year highs on Tuesday as investors prepared for the likelihood the Federal Reserve will raise rates as many as four times this year, and before the Treasury Department will sell new three-year notes.

Two-year note yields , which are highly sensitive to interest rates, jumped to 0.945% and three-year yields reached 1.237%, both the highest since February 2020.

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LONDON – Italy’s government bonds underperformed their euro zone peers on Tuesday as markets remained focused on the path of U.S. monetary policy normalisation and surging inflation.

Italy’s 10-year bond yield, which rolled over into a new benchmark, was up at 1.38% after touching its highest level since June 2020 at 1.397%. .

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TOKYO – Japanese government bond (JGB) yields rose on Tuesday, tracking firmer moves on U.S. Treasury yields overnight that helped outweigh relatively strong outcome of the Bank of Japan’s bond buying operations.

The 10-year JGB yield rose 1.5 basis points to 0.145% and the 20-year JGB yield rose 0.5 basis point to 0.525%.

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COMMODITIES

GOLD

Gold prices firmed above the key $1,800 mark on Tuesday, buoyed by a retreat in the dollar and U.S. Treasury yields, as investors awaited cues on expected policy tightening from Federal Reserve Chair Jerome Powell.

Spot gold was last up 0.1% at $1,803.20 per ounce by 09:47 ET (1447 GMT). U.S. gold futures rose 0.3% to $1,804.00.

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IRON ORE

Chinese stainless steel futures surged more than 5% on Tuesday, boosted by tight supply concerns as producers cut production, while strong raw material prices also offered support.

The most-actively traded stainless steel contract on the Shanghai Futures Exchange , for February delivery, jumped as much as 5.3% to 17,920 yuan ($2,812.39) per tonne.

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(BA)SE METALS

Nickel prices hit their highest in nearly 10 years on Tuesday as dwindling global inventories pointed to solid demand while an outage at the London Metal Exchange (LME) hit trading.

Benchmark three-month nickel on the LME was up 5% at $21,430 a tonne by 1720 GMT, its loftiest since touching $21,850 in February 2012.

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OIL

Oil rose to more than $83 a barrel on Tuesday, supported by tight supply and expectations that rising coronavirus cases and the spread of the Omicron variant will not derail a global demand recovery.

Brent crude gained $2.6, or 3.22%, to $83.46 a barrel by 11:30 a.m. ET (1630 GMT), it highest since early November, after having lost 1% in the previous session.

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PALM OIL

Malaysian palm oil futures reversed losses and hit a near 10-week closing high on Tuesday, underpinned by concerns over tight supply after official numbers showed a sharper-than-expected decline in December inventories.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange settled up 43 ringgit, or 0.8%, at 5,069 ringgit ($1,210.50) a tonne, its highest closing since Nov. 3.

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RUBBER

Japan rubber futures slid on Tuesday, as the yen’s recovery against the dollar prompted selling, while concerns that spreading of the Omicron coronavirus variant worldwide may slow global demand for the material dented market sentiment.

Osaka Exchange’s rubber contract for June delivery , finished 1.9 yen, or 0.8%, lower at 239.5 yen ($2.1) per kg. Japanese financial markets were closed on Monday for a national holiday.

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Bengaluru Bureau; +91 80 6749 1130

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