{"id":131389,"date":"2021-07-07T07:14:13","date_gmt":"2021-07-07T07:14:13","guid":{"rendered":"https:\/\/precoinnews.com\/?p=131389"},"modified":"2021-07-07T07:14:13","modified_gmt":"2021-07-07T07:14:13","slug":"stocks-stumble-as-mood-shift-benefits-bonds-dollar","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/markets\/stocks-stumble-as-mood-shift-benefits-bonds-dollar\/","title":{"rendered":"Stocks stumble as mood shift benefits bonds, dollar"},"content":{"rendered":"
SYDNEY (Reuters) – Asian share markets stumbled on Wednesday as a bout of risk aversion boosted bonds and the dollar, while investors braced for minutes from the Federal Reserve\u2019s last meeting which could confirm a hawkish turn in U.S. monetary policy.<\/p> Dealers were hard pressed to find a single catalyst for the sudden mood swing, but a Chinese crackdown on tech companies clearly had an impact.<\/p>\n Hong Kong stocks shed another 0.9% to near six-month lows, while U.S.-listed ride-hailing company Didi Global Inc shed more than 20% in New York. Alibaba Group <BABA.N., Baidu Inc and JD.com all fell.<\/p>\n MSCI\u2019s broadest index of Asia-Pacific shares outside Japan edged down 0.6%, while Japan\u2019s Nikkei slipped 1.2%.<\/p>\n Bucking the trend, Australian stocks managed to firm 0.7% and Chinese blue chips added 0.8%.<\/p>\n EUROSTOXX 50 futures and FTSE futures added 0.1%, while Nasdaq futures and S&P 500 futures barely moved.<\/p>\n Wall Street had been unsettled by a survey showing a slight cooling in the red-hot U.S. services sector, though at 60.1 the ISM index was still historically high.<\/p>\n \u201cNormally any ISM reading approaching 60 or above would be seen as strong, but details play to the idea that there is a speed limit to the recovery amid shortage of inputs and labour, alongside still elevated costs,\u201d said Rodrigo Catril, a senior FX strategist at NAB.<\/p>\n The skittish mood helped Treasuries extend their recent rally with yields on U.S. 10-year notes dropping almost 8 basis points overnight to 1.348%. That was the lowest since February and also the largest daily decline since February.<\/p>\n The outperformance of longer-dated debt saw the yield curve bull flatten, which could be a bet the Fed will tighten policy pre-emptively to head off inflation.<\/p>\n Minutes of the Fed\u2019s June policy meeting due later on Wednesday might show how serious members were about tapering their asset buying and how early hikes could begin.<\/p>\n Expectations of a hawkish tone helped the dollar rally against a basket of currencies to 92.543, up from a low of 92.003 on Tuesday. The euro dropped back to $1.1823, near its lowest since March while commodity-linked currencies slipped.<\/p>\n The dollar had less luck on the safe-haven yen, holding at 110.57.<\/p>\n \u201cWe now expect a period of broad USD strength over coming quarters,\u201d said Kim Mundy, a senior currency strategist at CBA.<\/p>\n \u201cOur view boils down to U.S. economic outperformance for a period, so we have downgraded our near\u2011term forecasts for all currencies we monitor against the USD.\u201d<\/p>\n In commodity markets, the bounce in the dollar offset the general risk-off mood to leave gold steady at $1,797 an ounce after briefly reaching as high as $1,814 overnight.<\/p>\n Oil prices had shed some recent gains after OPEC producers cancelled a meeting when major players were unable to come to an agreement to increase supply. [O\/R]<\/p>\n Analysts at NatWest Markets said the absence of a deal on expanding output was a positive for prices in the near term, but could be a liability over time.<\/p>\n \u201cA lack of agreement among major oil producers at least opens up the risk that the entire OPEC+ deal collapses, leading major oil producers to significantly step up production much faster,\u201d they said on a note.<\/p>\n The market was calmer on Wednesday, with Brent up 3 cents at $74.56 a barrel, while U.S. crude added 12 cents to $73.49.<\/p>\n