(Bloomberg) — Asian equities fell while major currencies made gains against the dollar in a cautious open to the week following further weakness on Wall Street and a defiant message to the world from China’s Communist Party congress.
Most Read from Bloomberg
Stocks dropped in Japan, Australia and Hong Kong, where technology companies led declines. Contracts for the S&P 500 and Nasdaq 100 rose after tumbling Friday, when Treasury yields climbed as year-ahead inflation expectations increased. US Yields fell slightly at the open in Asia.
The dollar eased against its Group-of-10 counterparts, providing a touch of respite to harried currency markets. Traders remained on guard for possible intervention to support the yen, which is near a 32-year low and within reach of the key 150 level versus the greenback. The pound rallied on expectations that the UK may reverse more of its unfunded tax cuts.
The outlook for consumer prices in the US continues to fuel bets that the Federal Reserve may make jumbo rate hikes at its next two meetings, further challenging global growth.
Against this negative backdrop, investors have to contend with news from Beijing, where President Xi Jinping said China’s global power had increased while warning of “dangerous storms” ahead. There were few signs of any let up in the Covid-Zero campaign or housing market policies that are weighing on the economy. Xi also said China would prevail in its fight to develop strategically important technology amid rising tension with the US.
The offshore yuan extended gains versus the dollar after China’s central bank halted its cash withdrawal via medium term loans for the first time in three months in a bid to boost the economy.
UK markets may be in for a particularly torrid week, with Britain’s beleaguered prime minister Liz Truss battling to rescue her premiership after the Bank of England ended its emergency bond-buying program on Friday.
Story continues
Fed officials in their latest comments suggested they were ready to hike rates higher than previously planned. Kansas City Fed President Esther…
..
