Asian equities closed marginally down in the red while crude oil climbed as investors monitors Fed speech ahead and diplomatic efforts to bring an end to the war in Ukraine.
The CSI300, HSI, KOSPI and SET climbed down marginally by 0.17%, 0.89% , 0.77% and 0.28% respectively, while TOPIX closed higher by 0.54%.
Futures contracts in the U.S., S&P 500 and Nasdaq 100 contracts retreated gains.
U.S treasury yield curve flattened with portions inverted, indicating a economic slowdown ahead. The U.S. 10 year yield climbed to about 2.8%.
Traders are closely monitoring a speech of Federal Reserve Chair Jerome Powell, later to be released on wee hours of Tuesday. The Fed is expected to lift its target rate to around 2% by the end of the year.
“Our concern is that the Fed is tightening into an economic slowdown as it prioritises high inflation,” Sue Trinh, head of Asia macro strategy at Manulife Investment Management, said on Bloomberg Television.
“It will balance that trade-off of slower growth, higher inflation by lagging the market pricing in terms of the pace, the magnitude and the duration of this tightening cycle.”
Crude oil continued its gains on war tensions and resurgence of COVID-19 infections in China implying a possible cut back in demand. The WTI is trading around $109 per barrel while Brent is trading at $112 a barrel.
