Business Maverick: Asian stock gauge drops amid rise in yields, crude: markets wrap

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Stocks retreated in Asia on Tuesday amid worries about Federal Reserve monetary tightening that have also boosted bond yields. Oil topped $91 a barrel after Saudi Arabia said OPEC+ may be forced to cut output.

MSCI’s Asia-Pacific equity index slipped to a near four-week low as Japan shed about 1%. S&P 500 and Nasdaq 100 futures stabilised, eking out gains after slumps of more than 2% in both indexes on Monday.

Doubts are creeping in about bets that the Fed will temper monetary-policy tightening, expectations that had helped to lift investor sentiment. For instance, hedge funds in a key part of the derivatives market have made record wagers that the US central bank will stick to a hawkish script. With total debt in the US at more than $30-trillion, a 1% increase in rates leads to a “huge” climb of more than $300-billion in interest payments, Tracy Chen, portfolio manager at Brandywine Global Investment Management, said on Bloomberg Television.

 

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