Asian stocks tumble after hawkish Powell comments

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Asian shares fell sharply on Wednesday, while the dollar advanced after hawkish comments from Federal Reserve Chair Jerome Powell raised the possibility of the U.S. central bank returning to large rate hikes to tackle sticky inflation. | Reuters

China shares fell 0.33%, while Hong Kong’s Hang Seng Index slid 1.4 percent .

Markets are now pricing in an almost 70 percent chance of a 50-basis point rate hike at the Fed’s March 21-22 policy meeting, according to CME’s FedWatch tool, up from about a 30percent a day ago. Shorter-term Treasury yields continued its ascent on Wednesday, with the two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, up 2.7 basis points at 5.038%, its highest since mid-2007.A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at -106 basis points, its deepest since August 1981, according to Refinitiv data.

The spotlight will now be on Friday’s U.S. payrolls data and next week’s inflation figures that will dictate further moves from the Fed.

 

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Asian stocks slip on weak China trade data, focus shifts to PowellAsian stocks pulled back as weak trade data weighed on Chinese stocks while investors awaited Federal Reserve Chair Jerome Powell’s testimony later in the day for clues on the central bank’s next move on rates. | Reuters
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