BEIJING: Asian markets retreated Friday, with Hong Kong’s benchmark falling nearly 2 percent, after a mixed batch of data on the U.S. economy dashed hopes that easier interest rates are coming soon.
Oil prices and U.S. futures fell. Tokyo’s Nikkei 225 declined 0.3 percent to 38,707.64, while the Kospi in South Korea sank 1.9 percent to 2,666.84.
Hong Kong’s Hang Seng was down 1.7 percent at 16,676.70 after reports said housing prices have continued to fall since February.
The Shanghai Composite index gained 0.3 percent to 3,055.16, while the S and P/ASX 200 shed 0.9 percent to 7,670.30.
On Thursday, U.S. stocks slipped, with the S and P 500 falling 0.3 percent to 5,150.48, though it’s still close to its all-time high set Tuesday. The Dow Jones Industrial Average declined 0.4 percent to 38,905.66, and the Nasdaq composite lost 0.3 percent to 16,128.53.
The moves were more decisive in the bond market, where Treasury yields rose after a report showed inflation was a touch hotter at the wholesale level last
month than economists expected. It is the latest in a string of data on inflation that has been worse than forecast, which has kept the door closed on earlier hopes that the Federal Reserve could start cutting interest rates at its meeting next week.
But other reports released Thursday also showed some softening in the economy, which kept alive hopes that the long-term trend for inflation remains downward.
The question hanging over Wall Street is how much the latest signals of potentially stubborn inflation will ultimately delay rate cuts. That in turn could damage the huge run U.S. stocks have been on since late October, rising in 16 of the last 19 weeks.
Fed officials will give their latest forecasts for where they see interest rates heading this year on Wednesday, following their latest policy meeting.
Among the data they will mull is a report from Thursday that said shoppers spent less at U.S. retailers last month than economists expected. Such data drags on the overall economy but could also remove u
pward pressure on inflation.
The government also said retail sales were weaker in January than earlier thought. Strong spending by U.S. households has been one of the linchpins keeping the economy out of a recession despite high interest rates.
A separate report said fewer U.S. workers applied for unemployment benefits last week than expected. That is good news for workers generally. But too much strength in the job market, which has remained remarkably resilient, could add upward pressure on inflation.
The mix of data sent the yield on the 10-year Treasury up to 4.28 percent from 4.19 percent late Wednesday. The two-year yield, which more closely tracks expectations for the Fed, rose to 4.69 percent from 4.63 percent.
In other trading early Friday, U.S. benchmark crude oil lost 15 cents to US$81.11 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, gave up 16 cents to US$85.26 per barrel.
The U.S. dollar fell to 148.19 Japanese yen from 148.32
yen. The euro slipped to US$1.0880 from US$1.0884.
Source: Emirates News Agency