Baca berita tanpa iklan. Gabung Kompas.com+

Asian Markets Rise as Recession Talk Tempers Rate Hike Expectations

June 24, 2022, 12.00 PM

HONG KONG, KOMPAS.com - Stocks rose in Asia on Friday, June 24, following another rally on Wall Street as investors try to process central bank moves to fight soaring inflation with the growing possibility that those measures will induce a recession.

Global markets have been thrown into turmoil for months by a perfect storm of crises that have left observers predicting a sharp contraction, including the Ukraine war, China's lockdown-induced economic troubles, supply chain snarls and spiking energy costs.

Expectations that the Federal Reserve and other central banks will have to keep lifting rates have left many traders fretting that the pain could go on for some time, with sovereign bond yields -- key gauges to future rates -- continuing to climb.

This week Fed boss Jerome Powell told lawmakers a recession was "certainly a possibility" and suggested officials were ready to press on with big rate hikes, following a three-quarter point lift this month.

Also read: Indonesia’s Trade Balance Surplus Maintains Economic Resilience, Says Central Bank

However, analysts said speculation that a recession is on the way has helped push yields down in recent days and led traders to scale back their expectations for the length of rate hikes.

Demand concerns have also helped send oil prices -- a key driver of inflation -- lower with both main contracts around 15 percent over the past week.

Added to the mix this week are comments from President Xi Jinping suggesting an end to China's tech crackdown as well as possible new measures aimed at boosting the economy.

"As we have been saying for some time now, for stocks to return to any semblance of form, it would likely require an unlikely upbeat mix of a seamless China growth recovery, a top in US bond yields, and much softer oil prices," said Stephen Innes at SPI Asset Management.

Also readIndonesia’s Economy Grows 5.01 Percent in First Quarter

"While a tall order and still a near-term unlikely combination scenario, the fall in commodity prices, especially oil, should be music to the Fed's ears, so some could be ticking one or two of those boxes off."

In early Asia trade investors took their cue from Wall Street, where all three main indexes closed with healthy gains, including a more than one percent advance on the Nasdaq.

Hong Kong, Tokyo, Shanghai, Sydney, Seoul, Singapore, Taipei, Manila and Jakarta were well up.

Markets are negotiating "a fraught transition from 'front-loaded' synchronised tightening towards demand destruction and peak 'price-pressure'," Citigroup Inc. strategists William O'Donnell and Edward Acton wrote in a note.

Source: Agence France-Presse

Simak breaking news dan berita pilihan kami langsung di ponselmu. Pilih saluran andalanmu akses berita Kompas.com WhatsApp Channel : https://www.whatsapp.com/channel/0029VaFPbedBPzjZrk13HO3D. Pastikan kamu sudah install aplikasi WhatsApp ya.



Comment wisely and responsibly. Comments are entirely the responsibility of the commentator as regulated in the ITE Law
There are no comments. Be the first to comment!
Report
Thank You! We have received your report. We will remove comments that conflict with the Community Guidelines and the ITE Law.

More Headlines

News
April 14, 2023, 12.38 PM

Indonesia Detects New Covid Arcturus Variant

Baca berita tanpa iklan. Gabung Kompas.com+
Baca berita tanpa iklan. Gabung Kompas.com+
Tinjau Persiapan Nataru, AHY Sapa Penumpang di Pelabuhan Tanjung Priok

MOST POPULAR

Baca berita tanpa iklan. Gabung Kompas.com+
Baca berita tanpa iklan. Gabung Kompas.com+
Close Ads
Oke
Tinjau Persiapan Nataru, AHY Sapa Penumpang di Pelabuhan Tanjung Priok