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Stocks and currencies seesawed on Wednesday after a rocket that struck inside the Polish border fueled fears of an escalation of the war in Ukraine.
Shares in Hong Kong, Australia and South Korea fell, as did European equity futures, amid significant volatility in intraday prices. US futures pared early declines to trade little changed.
Positive sentiment from the outlook for slower interest rate hikes from the Federal Reserve evaporated as traders in Asia turned their attention to geopolitical risks. Comments from US President Joe Biden -- suggesting the missile was unlikely to have been fired from Russia -- had only a temporary impact on investor confidence.
The Polish zloty trimmed its losses against the dollar while a gauge of the greenback traded within a broad range through the day, underscoring investor uncertainty.
“After a strong rebound in US equities and in the Chinese equity markets, I think it makes sense to have some consolidation,” Grace Tam, chief investment adviser for Hong Kong at BNP Paribas Wealth Management, said on Bloomberg Television. “With what happened in terms of the missile, it could be the trigger of the consolidation. Sentiment has gone from risk-on to a little bit risk-off.”
Treasury yields saw small gains after recent declines in line with pricing for the Fed’s policy rate. Oil and gold both slipped.
Key events this week:
US business inventories, cross-border investment, retail sales, industrial production, Wednesday
Fed’s John Williams, Lael Brainard and SEC Chair Gary Gensler speak, Wednesday
ECB President Christine Lagarde speaks, Wednesday
Eurozone CPI, Thursday
US housing starts, initial jobless claims, Thursday
Fed’s Neel Kashkari, Loretta Mester speak, Thursday
US Conference Board leading index, existing home sales, Friday
Some of the main moves in markets:
Stocks
Futures on the S&P 500 were little changed as of 2:45 p.m. Tokyo time. The S&P 500 gained 0.9%
Nasdaq 100 futures were little changed. The Nasdaq 100 rose 1.5%
The Topix Index was little changed
The Hang Seng Index fell 1.2%
Australia’s S&P/ASX 200 fell 0.3%
The Shanghai Composite Index fell 0.4%
Euro Stoxx 50 futures fell 0.4%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro rose 0.2% to $1.0373
The Japanese yen fell 0.3% to 139.73 per dollar
The offshore yuan fell 0.5% to 7.0815 per dollar
Cryptocurrencies
Bitcoin rose 0.2% to $16,919.25
Ether rose 0.8% to $1,255.46
Bonds
The yield on 10-year Treasuries advanced five basis points to 3.82%
Australia’s 10-year yield declined three basis points to 3.73%
Commodities
West Texas Intermediate crude fell 0.8% to $86.24 a barrel
Spot gold fell 0.3% to $1,774.30 an ounce
This story was produced with the assistance of Bloomberg Automation.
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