Gross picture in Asia – Losses for ‘heavy’ bank names in Australia

Asia-Pacific stock markets mixed with investors awaiting inflation data to be announced in the US, and mainly a signal from the Federal Reserve if it will react to the spike in inflation even with four rate hikes in 2022 .

US consumer prices have already jumped to 6.8%, the highest level in nearly 40 years. The jump in inflation led Goldman Sachs analysts to estimate for four interest rate hikes by the Federal Reserve this year, instead of the three previously expected. Analysts at JP Morgan and Deutsche Bank are also expecting four increases.

Meanwhile, nervousness in the US market feeds the impressive rally in US government bond yields. Yesterday, the 10-year yield of the US climbed even to 1.8%, having closed in 2021 close to 1.51%. The 10-year yield has completed seven days of ascent, the largest uptrend since April 2018, climbing to 1.808% which is the highest level since January 2020.

“In the midst of rising bond yields and falling stocks, markets are looking at the subtleties for the upcoming interest rate hikes,” Mizuho Bank’s Tan Boon Heng said in a note.

Markets expect the US Federal Reserve to raise interest rates by 76% in the March monetary policy meeting, from about 15% in mid-October, according to CME Group’s FedWatch

In this climate, in Japan the Nikkei 225 index fell by 0.85%, while the Topix index lost 0.55%.

In South Korea Kospi recovers with gains of 0.15%, while Kosdaq slips by 0.97%.

In the Hong Kong the Hang Seng index adds 0.37% to mainland China Shenzhen loses 0.54%, and Shanghai Composite records marginal losses.

In Australia the ASX 200 loses 0.7%. The heavily weighted index of financial companies is falling by 1.09%, as the country’s major banking names fell. Shares of Commonwealth Bank of Australia slipped 1.75% and ANZ fell 1.3%.