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U.K. Inflation Hits 9% in April; Highest Since 1982

Asian Stocks Down Ahead of Latest Fed Meeting Minutes

Stock MarketsJan 05, 2022 02:16
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By Gina Lee – Asia Pacific stocks were down on Wednesday morning, with investors awaiting the minutes from the U.S. Federal Reserve’s latest meeting for clues on the central bank’s interest rate hike moves.

Japan’s Nikkei 225 inched up 0.05% by 9:04 PM ET (2:04 AM GMT) while South Korea’s KOSPI slid 1.32%.

In Australia, the ASX 200 was down 0.26% and Hong Kong’s Hang Seng Index fell 1%.

China’s Shanghai Composite fell 0.67% and the Shenzhen Component was down 0.55%, after their worst New Year debut since 2019 on Tuesday. An index of Chinese companies trading in New York also fell the most in more than two weeks.

U.S. Treasuries steadied after yields rose for a second day over increasing bets that the Fed will hike interest rates at least three times beginning in May 2022. Yields on long maturities rose due to a cascade of new corporate bonds following a year-end pause.

Investors now await the minutes from the Fed’s meeting in December, due later in the day, and the U.S. jobs report, due to be released on Friday, for clues on the Fed’s potential pace of the hikes. Minneapolis Fed President Neel Kashkari said he supports two rate increases in 2022 to curb high inflation.

“Earlier we thought that rate hikes wouldn’t be on the table until mid-2022 but the Fed seems to have worked up a consensus to taper assets faster and hike sooner rather than later,” Standard Chartered (OTC:SCBFF) head of global G-10 FX research Steve Englander said in a note.

“But we don’t think inflation dynamics will support continued hiking. We suspect the biggest driver of asset markets will be when inflation and COVID-19 fears begin to ebb,” the note added.

Comments from more Fed officials are due throughout the week, with St. Louis Fed President James Bullard speaking at an event on Thursday and San Francisco Fed President Mary Daly speaking on a separate panel a day later.

Investors also digested Tuesday’s U.S. data, which showed that the Institute of Supply Management manufacturing purchasing managers index was a lower-than-expected 58.7 in December. The JOLTs job openings survey also showed 10.562 million vacancies in November.

Meanwhile, North Korea reportedly launched its first ballistic missile in about two months, days after leader Kim Jong Eun said that returning to nuclear talks with the U.S. was a low priority in 2022.

Asian Stocks Down Ahead of Latest Fed Meeting Minutes

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