- Asian stocks sank on Wednesday after the S&P 500 plunged the most in two months and treasury yields climbed substantially as investors priced in higher interest rates.
- Shares in Australia, Japan, and the Chinese mainland China declined, while Hong Kong's Hang Seng index wavered after plunging earlier in the day to levels that would represent a 10% correction from the market's late-January peak.
- US futures were modestly higher after the S&P 500 fell 2% on Tuesday, affecting all major sectors, while the tech-heavy Nasdaq 100 fell 2.4%. Weak projections from US retailing bellwethers exacerbated the gloom.
- The benchmark 10-yr treasury yield fell slightly after jumping 14 bps the day before. Australian rates have pared their gains on weaker-than-expected wage growth statistics.
- The yield on 10-yr Japanese government paper reached 0.505%, breaking beyond the BoJ's threshold for the second day as markets awaited the incoming central bank governor nominee's speech.
- The New Zealand currency gained ground against the US dollar after the central bank boosted interest rates by 50 bps. While the increase is a step down from previous hikes, policymakers still expect higher rates in the future.
- The dollar fell slightly after an overnight surge against the group of ten currencies. Stronger-than-expected purchasing managers' index readings for services and manufacturing backed advances in treasury rates and the euro.
- The action in the US signalled a shift in public view of interest rates. Investors expect the federal funds rate to rise to around 5.3% in June. This compared to a supposed top of 4.9% just three weeks ago and comes after a week of increased rhetoric from central bank officials.
