© Reuters. FILE PHOTO: A man holding an umbrella looks at an electronic quote board outside a brokerage house in Tokyo April 7, 2015. REUTERS/Issei Kato
By Andrew Galbraith
SHANGHAI (Reuters) – Asian stocks rebounded on Friday but expected a second straight weekly loss and remained near June 2020 lows, while the dollar hovered near 20-year highs as investors digested the concerns about high inflation and central bank policy tightening.
Those concerns eventually overcame hopes on Wall Street that high inflation could peak, pushing Thursday’s bear market confirmation close to nearly 20% from its all-time high in January. [.N]
In an interview later that day, US Federal Reserve Chairman Jerome Powell said the battle to control inflation “would include some pain.” And he reiterated his expectation of a half-percentage-point interest rate hike at each of the Fed’s next two policy meetings, while promising that “we’re ready to do more.”
After steep losses a day earlier, Asian stocks rallied on Friday. European stocks were also forecast for a firmer open, with a pan-regional rise of 1.08%, German up 0.93% and futures gaining 0.98%.
In afternoon trading, MSCI’s broadest index of Asia-Pacific stocks outside Japan rose about 1.8% from Thursday’s 22-month closing low, paring its losses to the week at less than 3%.
Australian stocks gained 1.93%, while the stock index jumped 2.64%.
In China, the blue-chip CSI300 rose 0.61% and Hong Kong’s rose 2.22%.
“We had some pretty big moves yesterday, and when you see those big moves, it’s only natural to have a retracement, especially since it’s Friday before the weekend. not really a new narrative,” said Matt Simpson, senior market analyst at City Index.
“I think there comes a time when you run out of sellers. I’m not really sure it’s going to be a buying rally yet, maybe a hedging rally before the weekend.”
The upside moves in equities were mirrored in the fall in US Treasuries, with the benchmark US 10-year yield hitting 2.8895% from a close of 2.817% on Thursday.
The policy-sensitive 2-year yield was 2.5924%, up from a close of 2.522%.
“In the shape of the US Treasury curve, we don’t see any particularly fresh recession/downturn signals, just the same sharp and consistent downturn predicted for H2 2023,” said Alan Ruskin, macro strategist at German Bank (ETR:), said in a note.
The US dollar remained near a 20-year high against a basket of currencies, buoyed by demand for safe haven as Russia bristled at Finland’s plan to seek NATO membership , with Sweden potentially following suit.
Moscow called Finland’s announcement hostile and threatened retaliation, including unspecified “military-technical” measures.
The , which tracks it against a group of currencies from other major trading partners, edged down about 0.1% to 104.65. But the greenback was stronger against the yen, which was trading at 128.62 to the dollar after hitting a two-week high of 127.5 hit overnight.
Europe’s single currency was 0.1% firmer at $1.0389 after trading lower earlier in the day.
The cryptocurrency bitcoin also rose, hitting $30,000 after the collapse of TerraUSD, a so-called stablecoin, took it to a 16-month low of around $25,400 on Thursday.
In commodity markets, oil prices were higher amid an impending European Union ban on Russian oil, but were still poised for their first weekly loss in three weeks, hit by concerns over China’s inflation and COVID lockdowns slowing global growth.
rose 1.32% to $107.53 a barrel, and the global benchmark rose 1.6% to $109.17 a barrel.
which had hit a three-month low on the back of the surging dollar, rose 0.16% to $1,824.61 an ounce. [GOL/]