Asian Stocks, Bonds to Slide as Inflation Jitters Take Hold
Asian stocks and bonds are expected to decline on Thursday due to inflation jitters. The Wall Street losses triggered by oil price increases and stronger-than-expected US economic data have fueled concerns about further interest rate hikes.
The yen is in focus as Japanese markets reopen after a three-week low, while New Zealand government bonds fell in early Asian trading, and Australian bond futures pointed to losses following the sell-off in Treasuries.
US oil rose in early trading after Brent crude jumped 3.9% to settle at US$103.08 a barrel. The sell-off deepened after a weak US$70 billion sale of five-year notes pushed the yield above 5% for the first time since 2007, while the US dollar strengthened against all major currencies.
Traders have ramped up bets on further rate hikes, placing upcoming inflation and labour market data firmly in the spotlight. Tony Miano at Wells Fargo Investment Institute said: 'This is the market telling us we have entered a genuine re-tightening cycle.'