Asian stocks fell to 2020 lows amid economic and inflation worries
Wall Street stocks struggled to extend the ascent following a two-day winning streak amid the ongoing rise in Treasury yields. The 10-year Treasury yield traded around 4.136%, the highest level since July 2008. The Nasdaq Composite lost 0.85%, the S&P 500 slipped 0.67% and the Dow Jones Industrial Average gave up 0.33% on Wednesday. Bucking the trend, shares of Netflix jumped more than 13% after the company posted earnings and revenue that beat expectations. The streaming giant also said there was a strong subscriber growth during the third quarter.
As risk appetite continued to ebb, Asian equities retreated on Thursday to their lowest since 2020 amid persisting fears of aggressive interest rate hikes by the Federal Reserve. MSCI’s broadest index of Asia-Pacific shares outside Japan fell nearly 2% while Japan’s Nikkei 225 slipped 0.92%. The Shanghai Composite gave up 0.32% despite reports that China was considering cutting the duration of quarantine for inbound visitors from 10 days to 7 days.
In Europe, stocks opened lower which comes alongside a sluggish mood seen in US stock index futures. Fears over inflation and rate hikes continue to weigh global financial markets, preventing equities from a more sustained and robust rebound. On the data front, France’s October business confidence arrived at 102 versus 102 prior. In Germany, PPI came in at +2.3% in September versus +1.3% m/m expected.
The US dollar index has settled below the 113.00 mark on Thursday after a solid rally witnessed a day earlier. The buck stays elevated while also struggling to extend the ascent even as risk-off tone persists across the financial markets. Against this backdrop, EURUSD slipped back to the descending 20-DMA, today at 0.9765, struggling for direction during the early European deals. Now, the pair needs to hold above 0.9750 in order to avoid another retreat towards the 0.9630 zone that capped the selling pressure last week.