Asian equities dipped on Monday as Russia-Ukraine war enters its second month and markets continues to weigh economic downturn from policy tightening.
The CSI300, KOSPI and TOPIX is down by 0.63%, 0.03%, 0.34% respectively while HSI is trading higher by 1.45%.
U.S futures contracts on S&P 500 and Nasdaq 100 retreated, signaling a pause in the global rally in equities from the lows sparked by the conflict. A gauge of the dollar pushed higher.
U.S. treasuries were mixed driven by fears that the Federal Reserve will lead to an aggressive global wave of interest-rate hikes to quell elevated inflation.
The 10-year Treasury yield remains above a technical trend line that has effectively served as a ceiling since the late 1980s. Bank of Japan said it will purchase an unlimited amount of 10-year bonds at a fixed rate to check yields.
“The Fed is trying to create a Goldilocks scenario by engineering a soft landing,” Saira Malik, chief investment officer at Nuveen, said on Bloomberg Television. “The equity markets are buying it and the bond markets aren’t.”
Malik said she expects only a moderate impact on global growth from the war, adding economic expansion will be strong enough to overcome inflation.
In-person talks between Ukrainian and Russian negotiating teams will resume this week, according to officials. U.S. officials are in damage control after President Joe Biden said Vladimir Putin “cannot remain in power.” Secretary of State Antony Blinken said the U.S. doesn’t have a strategy of regime change.
In cryptocurrencies, Bitcoin scaled $46,000 following a recent rally that’s enabled the digital token to erase losses and turn positive for the year.
