Markets across Asia continued their downward slide Wednesday as concerns over rising interest rates weighed heavily on investor sentiment, with all eyes turning to upcoming earnings from tech giant Nvidia.
Bond markets worldwide remained under pressure as traders increased expectations that the Federal Reserve might raise interest rates this year. The 10-year Treasury yield reached a 16-month peak of 4.687% overnight, while the 30-year yield climbed to 5.198% – levels not witnessed since 2007.
European markets appeared headed for a negative opening, with futures contracts down 0.7% across the region. Nasdaq futures declined 0.1% while S&P 500 futures dropped 0.2%.
Oil markets saw modest declines Wednesday, with Brent crude falling 0.5% but remaining above $110 per barrel at $110.7. The Strait of Hormuz remained effectively closed and U.S. President Donald Trump said he might need to strike Iran again, a day after he said he was postponing an imminent attack to allow for more negotiations with Tehran.
Meanwhile in Beijing, less than a week after Trump’s high-profile visit, Chinese leader Xi Jinping held talks with Russian President Vladimir Putin, saying it was imperative to stop the war in the Middle East.
MSCI’s broadest index of Asia-Pacific shares outside Japan declined 0.7% Wednesday, marking its fourth consecutive day of losses, while Japan’s Nikkei dropped 1.5% for its fifth straight session in the red.
South Korea’s KOSPI tumbled 1.7%. Samsung Electronics fell 1.4% after its union announced plans to proceed with an 18-day strike starting Thursday, potentially disrupting global semiconductor supplies.
China’s blue-chip CSI300 index remained unchanged, while Hong Kong’s Hang Seng index slid 0.6%.
“At this point of time, it remains my base case that we are seeing a corrective pullback after an absolutely phenomenal rally,” said Tony Sycamore, analyst at IG. “The U.S. yields obviously are creating some rumbles in the market and now attracting a lot of attention.
“Nvidia could come out and absolutely exceed expectations … but I don’t think so. I think the ability for Nvidia to just absolutely shoot the lights out and shock everybody like it has done, I don’t think that’s in its book of tricks anymore.”
The chipmaking giant will announce first quarter earnings after the market close on Wednesday. Expectations, as always, are sky-high. Revenue is projected to increase by almost 80% to nearly $79 billion, according to the median forecast in an LSEG survey of analysts.
Treasury bonds continued to nurse losses in Asian trading, with the benchmark U.S. 10-year note yield holding steady at 4.6613%, having surged 21 basis points over the past three sessions. The 30-year yield remained flat at 5.1795% following a 17 basis point jump since last Thursday.
The dollar maintained its position near a six-week high against major currencies. It held steady at 158.95 yen, having gained for seven consecutive sessions that reversed most of the intervention-driven losses on April 30 when Japanese authorities stepped into the market to safeguard the yen at the 160 mark.
The euro last traded at $1.1597, having touched its lowest level since April 8 overnight. The British pound was at $1.3391, not far from the six-week low it reached earlier this week.
Gold prices fell 0.4% to $4,463 an ounce, the lowest since the end of March as the U.S. dollar strengthened.
