[ad_1]
By Tom Westbrook
SINGAPORE (Reuters) – Asian shares fell on Wednesday as a strong rebound in global equities took a breather, while bond yields and the dollar retreated ahead of U.S. economic data and speeches from policymakers that are expected to bolster the case for interest rate cuts.
The S&P 500 ended eight sessions of gains with a 0.2% decline overnight. MSCI’s broadest index of Asia-Pacific stocks outside Japan fell 0.6%.
Hong Kong's Hang Seng Index fell 1.4% with JD.com falling 11% after Bloomberg News reported that Walmart, the company's largest shareholder, plans to sell its large stake.
Japan's Nikkei fell 1% at the open as the recovery from its early August collapse faced resistance at around 38,000 points, while further gains in the yen also weighed on sentiment.
“The sell-off itself has largely been corrected, with recession fears giving way to soft landing hopes again,” said Moh Siong Sim, an analyst at Bank of Singapore.
“But now we are back to square one… and the market needs validation before it can relax further, and that validation has to come from data.”
Early revisions to U.S. labor data are due later Wednesday, with a large downward revision expected, which would support a rate cut. U.S. and global PMI surveys are due on Thursday.
The dollar's slide pushed gold to record highs and sent the yen back to 145.48 yen per dollar, up 1.6% for the week so far and about 11% above a 38-year low hit last month.
The euro is up about 3% since the beginning of August so far, and at $1.1130 in morning trading, it has reached its highest level since early December and is testing key chart levels. [FRX/]
U.S. interest rate futures have priced in a 25 basis point cut next month, with a one-third chance of a 50 basis point cut. About 100 basis points of rate cuts are expected this year, and another 100 basis points next year.
“The current softer tone in the dollar is likely largely driven by expectations that Fed easing is increasingly imminent,” Jane Foley, a strategist at Rabobank, said in a note.
“This raises the question of whether hopes for a Fed rate cut are still overblown and whether there is a risk of a near-term drop of EUR/USD below $1.10.”
Federal Reserve Chairman Jerome Powell is scheduled to speak at the Jackson Hole Symposium in Wyoming on Friday. The Australian and New Zealand dollars held onto their recent big gains, with the AUD/USD at $0.6747 and the NZD/USD at $0.6157. [AUD/]
Bond markets remained supported by the mood, with 10-year Treasury yields falling to 3.81%, while 2-year yields held steady at 3.9962%.
Commodity prices steadied, with Brent crude futures at $77.17 a barrel, and Dalian iron ore finding a steady footing after a Bloomberg report that China plans to let local governments buy unsold homes in the latest move to support the property market.
China is the world’s biggest steel consumer, and markets are sensitive to any signs that the construction sector is getting back on track. Shares in major Australian mining companies were steady.
Gold prices settled at $2,516 an ounce, just below record levels hit on Tuesday.
In emerging markets, central banks in Thailand and Indonesia meet to set interest rates on Wednesday, although neither is expected to start cutting rates before the Federal Reserve.
(Edited by Mr. Navaratnam)
[ad_2]
Source