Asia markets slugged by recession risk, dollar strength
Asian stock markets : Link
Asia stocks ex-Japan hit 2-1/2 year low
U.S. benchmark yields top 4% for first time since 2010
Dollar index at 20-year high, squeezing emerging markets
Sterling slips anew as UK fiscal credibility shaken
By Wayne Cole
SYDNEY, Sept 28 (Reuters) - Asian share markets tumbled on Wednesday as surging borrowing costs intensified fears of a global recession, spooking investors into the arms of the safe-haven dollar and driving the Chinese yuan to record lows.
Yields on U.S. 10-year Treasuries US10YT=TWEB were shoved above 4.0% for the first time since 2010 as markets wagered the Federal Reserve might have to take rates past 4.5% in its crusade against inflation. FEDWATCH
Sterling also came under renewed pressure as Moody's warned that unfunded UK tax cuts would be "negative" for the country's credit standing, deepening a damaging selloff in gilts.
"It is now clear that central banks in advanced economies will make the current tightening cycle the most aggressive in three decades," said Jennifer McKeown, head of global economics at Capital Economics. "While this may be necessary to tame inflation, it will come at a significant economic cost."
"In short, we think the next year will look like a global recession, feel like a global recession, and maybe even quack like one, so that's what we're now calling it."
Surging rates and slowing growth is not a good mix for equities and MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 1.7% to its lowest since April 2020.
Japan's Nikkei .N225 shed 2.1% and South Korean stocks .KS11 fell 2.4% to a two-year low. Chinese blue chips lost 0.6%.
S&P 500 futures ESc1 got caught in the bearish mood and slipped 0.8%, while Nasdaq futures NQc1 dropped 1.0%. This would be the S&P 500's seventh session of losses and threaten the technically-important 200-week average at 3,590.
EUROSTOXX 50 futures STXEc1 fell 1.1%, while FTSE futures FFIc1 lost 1.0% as European borrowing costs blew out.
"European sovereign yields have soared to multi-year highs amid concerns about UK policy-making and a right-ward shift of Italian politics in the midst of still elevated inflation," wrote analysts at JPMorgan in a note.
"The Italian 10-year spread to the German Bund has eclipsed 250bp, well above the 200bp mark we believe makes the ECB uncomfortable."
Shaking investor confidence has been the collapse in sterling and UK bond prices, which could force some fund managers to sell other assets to cover resulting losses.
Underlining the risk of yet higher interest rates, the chief economist at the Bank of England said the tax cuts would likely require a "significant policy response". nL8N30Y43D
Moody's on Tuesday warned the UK government that large unfunded tax cuts were "credit negative" and could undermine the government's fiscal credibility.
MORE RISK PREMIUM, PLEASE
George Saravelos, global head of FX strategy at Deutsche Bank, said investors now wanted more to finance the country's deficits, including a 200-basis-point rate hike by November and a terminal rate up at 6%.
"This is the level of risk premium that the market now demands to stabilize the currency," said Saravelos. "If this isn't delivered, it risks further currency weakening, further imported inflation, and further tightening, a vicious cycle."
Sterling was under fire again at $1.0655 GBP=D3 , with the bounce from Monday's record trough of $1.0327 stopping far short of the $1.1300 level held before last week's UK Budget.
Yields on British 10-year gilts GB10YT=RR have risen a staggering 119 basis points in just four sessions to reach 4.50%, the sharpest such move since at least 1979.
The safe-haven dollar has been a major beneficiary from the rout in sterling, rising to a fresh 20-year peak of 114.680 =USD against a basket of currencies.
The dollar held at 144.67 yen JPY=EBS , testing the resolve of the Japanese authorities to protect the 145.00 level after last week's intervention.
The euro slipped anew to $0.9552 EUR=EBS and back toward last week's two-decade low of $0.9528. The dollar also touched a record high on the Chinese yuan at 7.2088 CNH= , having risen for eight straight sessions.
The mounting pressure on emerging market currencies from the dollar's rise is in turn adding to risks that those countries will have to keep lifting interest rates and undermine growth.
The ascent of the dollar and bond yields has also been a drag for gold, which was hovering at $1,624 an ounce XAU= after hitting lows not seen since April 2020.
Oil prices fell again as demand worries and the strong dollar offset support from U.S. production cuts caused by Hurricane Ian.
Brent LCOc1 fell $1.02 to $85.25 a barrel, while U.S. crude CLc1 lost 93 cents to $77.57 per barrel.
Asia stock markets Link
Asia-Pacific valuations Link
Reporting by Wayne Cole;
Editing by Shri Navaratnam
면책조항: XM Group 회사는 체결 전용 서비스와 온라인 거래 플랫폼에 대한 접근을 제공하여, 개인이 웹사이트에서 또는 웹사이트를 통해 이용 가능한 콘텐츠를 보거나 사용할 수 있도록 허용합니다. 이에 대해 변경하거나 확장할 의도는 없습니다. 이러한 접근 및 사용에는 다음 사항이 항상 적용됩니다: (i) 이용 약관, (ii) 위험 경고, (iii) 완전 면책조항. 따라서, 이러한 콘텐츠는 일반적인 정보에 불과합니다. 특히, 온라인 거래 플랫폼의 콘텐츠는 금융 시장에서의 거래에 대한 권유나 제안이 아닙니다. 금융 시장에서의 거래는 자본에 상당한 위험을 수반합니다.
온라인 거래 플랫폼에 공개된 모든 자료는 교육/정보 목적으로만 제공되며, 금융, 투자세 또는 거래 조언 및 권고, 거래 가격 기록, 금융 상품 또는 원치 않는 금융 프로모션의 거래 제안 또는 권유를 포함하지 않으며, 포함해서도 안됩니다.
이 웹사이트에 포함된 모든 의견, 뉴스, 리서치, 분석, 가격, 기타 정보 또는 제3자 사이트에 대한 링크와 같이 XM이 준비하는 콘텐츠 뿐만 아니라, 제3자 콘텐츠는 일반 시장 논평으로서 "현재" 기준으로 제공되며, 투자 조언으로 여겨지지 않습니다. 모든 콘텐츠가 투자 리서치로 해석되는 경우, 투자 리서치의 독립성을 촉진하기 위해 고안된 법적 요건에 따라 콘텐츠가 의도되지 않았으며, 준비되지 않았다는 점을 인지하고 동의해야 합니다. 따라서, 관련 법률 및 규정에 따른 마케팅 커뮤니케이션이라고 간주됩니다. 여기에서 접근할 수 있는 앞서 언급한 정보에 대한 비독립 투자 리서치 및 위험 경고 알림을 읽고, 이해하시기 바랍니다.