22nd September Thursday 2022: Asian markets react to Fed hikes

IC Markets No Comments

Global Markets:

  • Asian Stock Markets : Nikkei down 0.58%, Shanghai Composite down 0.27%, Hang Seng down 1.82%
  • Commodities : Gold at $1679.90 (+0.25%), Silver at $19.64 (+0.80%), Brent Oil at $91.02 (+1.32%), WTI Oil at $84.14 (+1.45%)
  • Rates : US 10-year yield at 3.520, UK 10-year yield at 3.304, Germany 10-year yield at 1.854

News & Data:

  • (CHF) SNB Policy Rate 0.50% vs 0.50% expected
  • (USD) Federal Funds Rate 3.25% vs 3.25% expected
  • (USD) Existing Home Sales 4.80M vs 4.69M expected

Markets Update:

Asian stock markets are trading mostly lower on Thursday, following the broadly negative cues from Wall Street overnight, after the US Fed raised interest rates by another three-quarter of a percentage point to their highest level since early 2008 and signaled further aggressive rate hikes for the remainder of the year. With inflation remaining elevated, the Fed also said it expects that ongoing interest rate increases will be appropriate. Fed officials expect to increase rates to 4.6 percent by the end of 2023 before eventually scaling back rates in 2024 and 2025.

Hong Kong’s Hang Seng index slumped 2.1%, while the Taiwan Weighted index shed 1.1%. South Korea’s KOSPI also fell by nearly 1%. The Japanese stock market is significantly lower in choppy trading on Thursday, extending the losses in the previous session, with the Nikkei 225 just floating a tad above the 27,000 mark, with weakness across most sectors as traders digest another rate hike by the US Fed and the hawkish comments by Fed Chair Jerome Powell.

The dollar shot up to an over 20-year high after the hike, while U.S. 10-year Treasury yields rose to new 11-year peaks. Crude oil prices drifted lower Wednesday amid concerns about the outlook for energy demand after the Federal Reserve’s announcement of a sharp hike in interest rates raised fears about a recession.

Upcoming Events:

  • 11:00 AM GMT – (GBP) MPC Official Bank Rate Votes
  • 11:00 AM GMT – (GBP) Monetary Policy Summary
  • 11:00 AM GMT – (GBP) Official Bank Rate
  • 12:30 PM GMT – (USD) Unemployment Claims