Asian stock market mixed, US futures up on concerns over central bank interest rates, crude oil price and yield

Asian stocks traded mixed on Monday as investors gauged the trajectory of central bank monetary policy tightening aimed at stifling inflation.

Shares slid in Japan and Australia. Tech stocks rose in Hong Kong after a gauge of Chinese companies traded in the United States rose 2% in the past two trading sessions last week. China has oscillated between gains and losses as Beijing eases Covid-19 restrictions. US futures were choppy.

Treasury yields stabilized. Strong hiring in May hinted that the Federal Reserve will not give up on its pace of steep interest rate hikes to contain price pressures. The next target is May consumer prices expected this week, which can help gauge whether US inflation has peaked. A dollar gauge was steady.

Crude oil traded near $120 a barrel as scarcity fears persist. Saudi Arabia raised prices in its biggest Asian market more than expected, and the United States was considering allowing more sanctioned Iranian oil into world markets to counter falling Russian supplies.

Investors fear that a restrictive Fed could push the US economy into recession. The jobs report eased some concerns that the economy was slowing too sharply, but also bolstered the view that the Fed will continue to raise rates to rein in rising inflation. Cleveland Fed Chair Loretta Mester said she would support a half-point hike in September if inflation does not ease. Market-derived odds for a third 50 basis point increase in September remained flat at nearly 85%.

“The crucial question for markets is whether inflation can be brought under control by central banks without generating a recession,” Shane Oliver, head of investment strategy and chief economist at AMP Capital, said in a note. . “Equities are set to see continued near-term volatility as central banks continue to tighten to combat high inflation, the war in Ukraine continues and recession fears linger.”

The European Central Bank will announce an end to bond purchases this week and officially start the countdown to higher borrowing costs in July, joining its global counterparts in tightening monetary policy in the face of high inflation.

Elsewhere, the pound remained stable amid risks from a vote of confidence in the leadership of British Prime Minister Boris Johnson.

Some of the major moves in the markets: Stocks

• S&P 500 futures rose 0.2% at 10:37 a.m. in Tokyo. The S&P 500 fell 1.6%
• Nasdaq 100 futures rose 0.2%. The Nasdaq 100 fell 2.7%
• The Topix index fell 0.2%
• The Australian S&P/ASX 200 index lost 0.5%
• The Hang Seng index has changed little
• The Shanghai Composite Index fell 0.1%

Currencies

• The Bloomberg Dollar Spot Index remained stable
• The Japanese yen rose 0.2% to 130.64 per dollar
• The offshore yuan rose 0.1% to 6.6509 per dollar
• The euro was at $1.0712

Obligations

• The yield on 10-year Treasury bills was 2.94%
• The Australian 10-year bond yield was 3.49%

Goods

• West Texas Intermediate crude rose 0.4% to $119.32 a barrel
• Gold was at $1,853.50 an ounce