Asian stocks edge down; dollar rides Treasury yields higher
Asian shares tracked a negative lead from Wall Street on Wednesday, while the dollar and Treasury yields jumped as traders pared back expectations for the pace and scale of rate cuts by the Federal Reserve this year.
The latest shift in rate expectations came after an upside surprise in U.S. inflation on Tuesday which showed the consumer price index (CPI) rising 3.1% on an annual basis, above forecasts for a 2.9% increase.
Futures now point to about 87 basis points of easing priced in for the Fed this year, as compared to 110 bps prior to the data release and 160 bps at the end of last year.
That kept pressure on global stocks, which had rallied strongly towards the end of last year on aggressive bets for rate cuts by major central banks globally in 2024.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.8% in early Asia trade and was headed for a fifth straight day of losses.
S&P 500 futures and Nasdaq futures were trading near flat. EUROSTOXX 50 futures lost 0.3%.
«The stronger data pushes back on the hope of a rate cut from the Federal Reserve any time soon,» said Daniela Hathorn, senior market analyst at Capital.com.
«We'll likely have to wait for the second half of the year for the Fed to start cutting, but the issue isn't so much whether the bank will cut rates this year, as that is an almost certainty at this point, but how many rate cuts there will be.»
Even Japan's standout Nikkei was not spared from the beating and fell 0.7%, after gaining 2.9% in the previous session and topping
