US yields fell amid dovish Fed signals; HK stocks slide on COVID fears According to Reuters

© Reuters. FILE PHOTO: A man wearing a protective mask, amid the coronavirus disease (COVID-19) outbreak, walks past an electronic board showing stock indices of many countries, including both Russian Trading System (RTS) Index is empty, outside a brokerage firm in

By Kevin Buckland

TOKYO (Reuters) – Long-term U.S. Treasury yields fell to their lowest in more than seven weeks on Friday while the dollar fell near recent lows against other major currencies as The market continues to digest dovish signals from the Federal Reserve.

Expectations for a less aggressive US monetary tightening pace as soon as next month continued to support some stock markets in Asia, but Hong Kong’s fell sharply on record COVID-19 infections in China dimmed the outlook.

The index fell to 3.659%, its lowest level since October 5 in Tokyo trading, following the US Thanksgiving holiday on Thursday. The two-year yield slid to a one-week low at 4.44%.

measures the greenback against the euro, yen and four other rivals, swinging not far from Thursday’s low of 105.62 and last standing at 105.86.

A “significant majority” of Fed policymakers agreed that it “may be appropriate soon” to slow the pace of rate hikes, the minutes of their latest meeting showed on Wednesday.

Futures markets suggest investors now see US interest rates peaking just above 5% around May and are pricing in about a two-thirds chance the Fed will slow the pace of hikes by half a point on Dec. from a 75 basis point rally.

“After seeing how the market reacts – stocks rally, bond yields fall, and the dollar weakens – if I were the Fed, I think I’d better say something real. because otherwise the last 75 basis points, ING economist Rob Carnell, said the tightening measures I’ve taken are essentially meaningless and the next 50 will be on the market. the field swallowed, ‘Don’t worry about it, the pivot is coming’.

“You want your rate hike to mean something, so I think once people have digested their turkey and get back to work – probably early next week – we will heard some pretty hawkish things from the Fed.”

U.S. E-mini futures rose 0.2% as trading resumed on Wall Street on Friday.

Asia-Pacific shares were mixed, with the Australian benchmark managing a 0.35% gain, but the tech-led sell-off in Hong Kong weighed on sentiment in other markets. other areas in the region.

Hang Seng fell 0.93%, with the technology sector down 2.22%.

fell 0.34% and Korea’s Kospi lost 0.31%.

China reported a record high number of COVID-19 infections on Thursday, with cities across the country imposing local lockdowns, mass testing and other restrictive measures, quelling recent optimism. about the world’s second-largest economy moving from a strict no-COVID policy to living with the disease.

ING’s Carnell said: “Investors are right to be worried. “They’re still in China without an adequate health network to be able to deal with a full-blown outbreak with so many sick people.”

Even so, mainland China’s blue-chips gained 0.51% thanks to the government’s measures to support the property market. The real estate developer stock index rose 5.33%.

Oil rose slightly, offsetting a bit of this week’s decline, on concerns about Chinese demand and expectations that the high price ceiling planned by the Group of Seven for Russian oil would continue to supply. [O/R]

Futures contracts edged up 13 cents, or 0.2%, to $85.47 a barrel.

U.S. West Texas Intermediate (WTI) crude oil futures were up 35 cents, or 0.5%, from nearly $78.32 a barrel on Wednesday. No WTI deal on Thursday due to US holiday.

Both contracts are headed for a third straight week of losses, on track for a roughly 2% drop.

Gold rose 0.2 percent to $1,758.44 an ounce amid a weaker dollar.

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