Asian shares wary on Middle East as tech earnings loom
Middle East clouded sentiment in a week laden with data on U.S. growth and inflation as well as earnings from some of the world's largest tech companies.
Washington warned over the weekend of a significant risk to U.S. interests in the region as ally Israel pounded Gaza and clashes on its border with Lebanon intensified.
The European Central Bank and Bank of Canada also hold policy meetings and, while no hikes are expected, investors will be sensitive to guidance on futures moves.
A recent surge in bond yields has tightened monetary conditions without the central banks having to do anything, allowing the Federal Reserve to signal it will likely stay on hold at its policy meeting next week.
Indeed, futures imply around a 70% chance the Fed is done tightening for this cycle and are flirting with the chance of rate cuts from May next year.
The jump in yields has challenged equity valuations and dragged most of the major indices lower last week, while the VIX 'fear index' of U.S. stock market volatility hit its highest since March.
Early Monday, both S&P 500 futures and Nasdaq futures added 0.3%, though U.S.
10-year Treasury yields were up at 4.946% and edging back toward 5.0%.
MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.1% to be near its lowest in almost a year. Japan's Nikkei eased 0.4%, as did South Korea's market.
Investors will be hoping earnings from U.S. tech majors will provide some relief this week with Microsoft, Alphabet, Amazon and Meta Platforms all reporting.
