Stocks stumble, dollar and gold rise as traders weigh US rates, election
By Ankur Banerjee
SINGAPORE, Oct 23 (Reuters) -Gold prices jumped to record high and the dollar was on the rise again on Wednesday, keeping the pressure on the yen and the euro, while stocks in Asia stuttered as investors were reluctant to place major bets ahead of a hotly contested U.S. election.
The shifting expectations around how fast and deep the Federal Reserve will cut rates have also hurt risk sentiment, with traders now anticipating the U.S. central bank to be measured in its easing.
That has taken U.S. Treasury yields to a three-month peak and the dollar to multi-month highs against the euro, sterling and the yen, which is now back at 150 per dollar levels, prompting verbal warnings from Japanese officials.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was last 0.06% higher. Tokyo's Nikkei .N225 was slightly lower in early trading.
"Volatility within a range bound trade is increasingly becoming the norm, as markets brace for pivotal weeks ahead, including the U.S. presidential election and a heavy corporate earnings agenda," said Anderson Alves, a trader with ActivTrades.
China and Hong Kong stocks made a steady open of trade on Wednesday, as the promise of government help for the economy supported the major indexes to settle in at higher levels.
Shifting momentum towards a likely Donald Trump presidency has been in focus for investors, with Trump policies including tariffs and restrictions on undocumented immigration expected to increase inflation. That in turn has supported the dollar on expectations U.S. rates may remain relatively high for a longer-than-anticipated period.
Trump's odds of beating Vice President Kamala Harris, the Democratic candidate, have recently edged higher on betting websites, though opinion polls show the race to the White House remains too tight to call.
With less than two weeks to go for the Nov. 5 election, investors are girding for volatility in the markets.
The yield on benchmark U.S. 10-year notes US10YT=RR was 4.216% in Asian hours after touching a three-month high of 4.222% in the previous session.
"The Treasury sell-off has deepened this week as markets acknowledge that the Fed risks reigniting inflation if it eases into a strong economy," said Prashant Newnaha, a senior Asia-Pacific rates strategist at TD Securities.
"Trump's improving election odds are also tempering market expectations for the Fed to continue easing into 2025 and the possibility of the Fed moving to the sidelines for six months next year cannot be ruled out."
Markets are currently pricing in 41 basis points (bps) of cuts for the year, with another 100 bps priced in for next year.
Traders anticipate the Fed to lower borrowing costs by 25 bps next month, having tempered their wagers of a larger cut in the wake of strong economic data. The Fed kicked off its easing cycle with a 50 bps cut in September.
The expectations of a measured pace of rate cuts from the Fed has led the dollar higher in recent weeks. The dollar index =USD, which measures the U.S. currency against six rivals, touched 104.17, its highest since Aug. 2.
The yen JPY=EBS slid to a three-month low of 151.74 per dollar in the Asian morning, while the euro EUR=EBS hit $1.0792, its lowest level sine Aug. 2.
In commodities, gold prices hit a record high of $2,749.07 in early trade before giving up some of the gains to settle near $2,743.42 as the conflict in the Middle East along with uncertainty around the Fed outlook and U.S. election stokes demand for safe-haven assets. GOL/
Brent LCOc1 crude futures fell 0.4% to $75.73 a barrel, while West Texas Intermediate crude futures CLc1 eased 0.38% to $71.47 per barrel after a sharp rise so far this week. O/R
World FX rates YTD http://tmsnrt.rs/2egbfVh
Asian stock markets https://tmsnrt.rs/2zpUAr4
Reporting by Ankur Banerjee
Editing by Shri Navaratnam
To read Reuters Markets and Finance news, click on https://www.reuters.com/finance/markets For the state of play of Asian stock markets please click on: 0#.INDEXA
Relaterade tillgångar
Senaste nytt
Ansvarsfriskrivning: XM Group-enheter tillhandahåller sin tjänst enbart för exekvering och tillgången till vår onlinehandelsplattform, som innebär att en person kan se och/eller använda tillgängligt innehåll på eller via webbplatsen, påverkar eller utökar inte detta, vilket inte heller varit avsikten. Denna tillgång och användning omfattas alltid av i) villkor, ii) riskvarningar och iii) fullständig ansvarsfriskrivning. Detta innehåll tillhandahålls därför uteslutande som allmän information. Var framför allt medveten om att innehållet på vår onlinehandelsplattform varken utgör en uppmaning eller ett erbjudande om att ingå några transaktioner på de finansiella marknaderna. Handel på alla finansiella marknader involverar en betydande risk för ditt kapital.
Allt material som publiceras på denna sida är enbart avsett för utbildnings- eller informationssyften och innehåller inte – och ska inte heller anses innehålla – rådgivning och rekommendationer om finansiella frågor, investeringsskatt eller handel, dokumentation av våra handelskurser eller ett erbjudande om, eller en uppmaning till, en transaktion i finansiella instrument eller oönskade finansiella erbjudanden som är riktade till dig.
Tredjepartsinnehåll, liksom innehåll framtaget av XM såsom synpunkter, nyheter, forskningsrön, analyser, kurser, andra uppgifter eller länkar till tredjepartssajter som återfinns på denna webbplats, tillhandahålls i befintligt skick, som allmän marknadskommentar, och utgör ingen investeringsrådgivning. I den mån som något innehåll tolkas som investeringsforskning måste det noteras och accepteras att innehållet varken har varit avsett som oberoende investeringsforskning eller har utarbetats i enlighet med de rättsliga kraven för att främja ett sådant syfte, och därför är att betrakta som marknadskommunikation enligt tillämpliga lagar och föreskrifter. Se till så att du har läst och förstått vårt meddelande om icke-oberoende investeringsforskning och riskvarning om ovannämnda information, som finns här.
