ASIA-PAC EQUITY WRAP: Asia stocks declined following the hawkish headwinds from US

Analysis details (05:57)

Asia-Pac stocks declined following the headwinds from US including 40-yr high inflation and hawkish comments from Fed's Bullard who favours 100bps of increases by July 1st with a 50bps lift off next month and suggested the Fed should consider inter-meeting rate increases. This saw the 10yr yield climb to above 2.0% and resulted in markets pricing in a greater chance of a more aggressive lift off in March with the CME FedWatch Tool currently showing a 98.6% probability for a 50bps point hike at next month’s meeting, while Goldman Sachs now sees 7 rate hikes by the Fed this year. ASX 200 (-0.7%) was pressured with tech leading the declines as the sector suffered the brunt of the higher yield environment. Nikkei 225 was closed for holiday and the KOSPI (-0.9%) was subdued after another day of record COVID-19 cases and following a couple of chaebol earnings releases from LG Corp and Lotte Corp. Hang Seng (-0.7%) and Shanghai Comp. (-0.2%) were also pressured but with losses in the mainland stemmed after the recent stronger than expected Aggregate Financing data from China and with press reports speculating that the PBoC could ease again next week.

11 Feb 2022 - 05:55- Fixed IncomeResearch Sheet- Source: Newsquawk