Aug 22, 2022 01:31AM ET
By: AnalysisWatch
Asian stocks fell on Monday and the dollar extended its gains on concerns about global growth as most central banks continued to raise rates, while a slight easing in China only highlighted problems in the property market there.
Futures are fully primed for another rate hike in September, with the only question being whether it will be by 50 or 75 basis points. Rates are expected to reach 3.5% to 3.75% by the end of the year.
The unease over China's economy pushed the yuan to a 23-month low while weighing on stocks across the region.
Although Chinese blue chips managed to gain 0.7%, the MSCI's broadest index of Asia-Pacific shares outside Japan fell a further 0.6%.
South Korea's KOSPI lost 1.3%, while Japan's Nikkei fell 0.5%, although it gained support from the recent sharp reversal in the yen.
Futures on the ES 50 index lost 0.2% and futures on the FTSE index lost 0.1%. Futures on the S&P 500 fell 0.5%, while futures on the Nasdaq fell 0.6%.
The S&P 500 index repeatedly failed to break through the 200-day moving average of around 4320 points, finishing the week down 1.2%.
Ten-year Treasury yields rose by 14 basis points during the week, last standing at 2.98%, with the curve remaining deeply inverted, reflecting the risk of a recession.
The general atmosphere of global uncertainty tended to strengthen the US dollar as the most liquid of safe havens, leaving it at 108.22 against a basket of currencies. It jumped 2.3% last week, its best performance since April 2020.
The dollar was firm at 137.25 yen, having shot up 2.5% last week, while the euro struggled at $1.0036 after losing 2.2% last week.
The minutes of the European Central Bank's latest policy meeting will be released this week and are likely to sound a hawkish note as they decided to raise interest rates by 50 basis points.
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