Asian equities slipped on Friday following biggest quarterly drop in global equities in two years, as investors worried about the impact of the Russian-Ukrainian war and rising risks of recession.
Equities in Mainland China trading higher while Hong Kong, South Korea and Japan largely counting losses. The MSCI Broad Market Index ex Asia dropped by 0.75%.
The U.S. two-year and 10-year notes was not marginally above zero on Friday morning, after briefly inverting. U.S. 10-year notes last yielded 2.3781%, from 2.325% late on Thursday while the 2-year yield was a 2.3648%, from 2.284%.
Russian President Vladimir Putin struck back at Western sanctions on Moscow, threatening to halt contracts supplying Europe with a third of its gas unless they are paid in roubles.
The move prompted Germany, the most reliant on Russian gas, to accuse him of “blackmail” as it activated an emergency plan that could lead to rationing.
Meanwhile in Asian amid supply chain constrains and higher input costs, Japanese business confidence hit nine-month low in the first quarter according to a Bank of Japan survey.
“A seeming end to the Ukraine conflict would in many respects make it easier for the Fed to stick to its hawkish line given the rally in growth stocks, and related decline in credit spreads, means an improvement in financial conditions,” said Christopher Wood, global and Asia equity strategist at Jefferies, as reported by Reuters.
“Political pressure remains, for now at least, on the Fed to tighten, he added.”
U.S. crude WTI is trading around $100.18 per barrel, global benchmark Brent crude edged 0.12% higher to $104.84.
