Asian equities fall once again

Markets nerves ahead of FOMC meeting

Overnight, panic around rate hike expectations by the Fed increased and US bond yields rose aggressively across the curve. Recessionary fears increased and in the self-fulfilling negative feedback loop created, US equities were once again crushed. The S&P 500 slumped by 3.87%, the Nasdaq tumbled by 4.68%, and the Dow Jones lost 2.73% as the least ugly value horse in the glue factory. In Asia, some short-covering has lifted US futures slightly higher, but the gains pale in comparison to the overnight losses. Futures on all three main indexes are around 0.35% higher today.

The small gains by US futures seem to have taken the edge off the negativity in Asian markets today, although they are still in the red. One notable loser was Australia, where the ASX 200 and All Ordinaries have lost 5.0%. But for context, Australia was closed yesterday, and thus local markets were playing catch-up to the losses internationally on Friday and yesterday.

Elsewhere, Japan’s Nikkei 225 has fallen by 2.0%, with South Korea’s Kospi losing 1.20%. Mainland China’s Shanghai Composite is down by 1.70%, while the CSI 300 has lost 2.0%, with Hong Kong’s Hang Seng down just 1.10%, a surprisingly robust performance.

The more value-orientated regional APAC markets have also been spared the worst of the selling. Singapore is 1.0% lower, Kuala Lumpur and Jakarta have actually recorded 0.50% in what I can only assume is a resource play. Thailand is down just 0.40%, with Manila easing 0.65% lower.

European markets also fell heavily yesterday, coat-tailing US markets south as Eurozone yields also squeezed higher. That should continue this afternoon, although Asia’s performance today should mean the panic of yesterday subsides. In the US, lower PPI prints this evening could give Wall Street to unwind some shorts into the FOMC decision tomorrow.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Jeffrey Halley

Jeffrey Halley

Senior Market Analyst, Asia Pacific
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley is OANDA’s senior market analyst for Asia Pacific, responsible for providing timely and relevant macro analysis covering a wide range of asset classes. He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays. A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV, Channel News Asia as well as in leading print publications including the New York Times and The Wall Street Journal, among others. He was born in New Zealand and holds an MBA from the Cass Business School.
Jeffrey Halley
Jeffrey Halley

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