World: Global markets: Asian stocks weaken as Fed, BoE fuel uncertainty before US CPI data

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Asian stocks followed Wall Street lower and bond yields remained depressed on Thursday as investors weighed the risks of global recession amid hawkish Federal Reserve rhetoric and uncertainty about the Bank of England's commitment to stabilising markets.

The recession risks also fuelled concerns about demand for oil, and crude prices failed to bounce after the previous day’s 2% fall.

Australia’s stock benchmark was an outlier, eking out a 0.1% gain, buoyed by big gains for Qantas after the airlineUS emini stock futures also offered some slight hope, rising 0.1% following a 0.33% decline in the S&P 500 from overnight. Markets lay 90% odds for another 75 basis-point rate hike in November, versus 10% probability of a half-point bump.Wednesday’s minutes were “not the dovish pivot some market participants are looking for”, Joseph Capurso, head of international economics at Commonwealth Bank of Australia, wrote in a client note.The dollar index, which gauges the greenback against six major rivals, stuck near the middle of its range this week, trading little changed at 113.27.

Benchmark 10-year gilt yields had swung from a fresh 14-year peak at 4.632% to close at 4.429% on Wednesday, little changed from the previous session.

 

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