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A gauge of Asian shares fell as concerns persist over the path of global monetary policy and the health of US banks. New Zealand’s dollar rallied and the nation’s stocks retreated after the central bank raised interest rates by more than expected.
MSCI Inc.’s regional benchmark was set to end a six-day rally as it slipped about 0,5 percent, with almost all sectors traded in the red yesterday. Contracts for US equities were little changed after the S&P 500 dropped on Tuesday, dragged down by shares of financial heavyweights. Chinese markets are closed for a holiday.
A measure of greenback strength was little changed as most major currencies traded in narrow ranges. The New Zealand dollar jumped to the highest level since mid-February following the unexpected 50-basis-point rate hike. The nation’s two-year government bond yields surged about 12 basis points.
The Australian currency gave up its advance and the policy-sensitive three-year government bond yield fell. The governor of the Reserve Bank of Australia said Wednesday that rates may still rise. The RBA paused its tightening cycle on Tuesday.
Meanwhile, the two-year Treasury yield ticked higher after declining 14 basis points in the US session as data showed a drop in job openings.
That bolstered bets the Federal Reserve will soon wrap up its tightening campaign. Treasuries underwent one of the most turbulent quarters in years in the period through March as traders debated the outlook for inflation amid fears of contagion from the banking sector’s turmoil.
Swap contracts downgraded the odds of a quarter-point rate hike at the Fed’s May meeting easing to around 50 percent from closer to 60 percent. – Bloomberg.
Online Reporter