(Adds context, European futures)
Jan 31 (Reuters) – Asian stocks edged lower on Tuesday as bonds edged lower as investors braced for a turbulent week with central bank meetings, a slew of earnings reports and key U.S. economic data. I accepted a small loss.
Investors are widely expecting the US Federal Reserve to raise interest rates by 25 basis points (bps) on Wednesday. Interest rate announcements are due on Thursday from both the Bank of England and the European Central Bank, both of which are expected to raise interest rates by 50 bps.
Meanwhile, more than 100 S&P 500 companies, including Apple, Amazon.com and Google parent Alphabet, are due to report results this week, along with a notable U.S. employment figure.
“It’s an important week for both central banks and U.S. equities, with several high-profile earnings calls providing a micro-picture of the macro economy,” analysts at ANZ said in a note.
“We expect a 25 basis point (US) rate hike and expect the Fed to warn of an early pause in the tightening cycle….Risk appetite may be vulnerable to a correction .”
European markets were set to open lower with Eurostox 50 futures across all regions down 0.48%, German DAX futures down 0.47% and FTSE futures down 0.29%. US stock futures, S&P 500 e-minis fell 0.06% on him.
In Asia, MSCI’s broadest index of non-Japanese Asia-Pacific equities fell 1.1%. The index has him up 9.9% so far this month and is set to hit his best January performance since 2012.
Japan’s Nikkei stock index fell 0.23% and Australian shares fell 0.15%.
China’s economic activity returned to growth in January after a wave of COVID-19 infections passed through the country faster than expected following abandonment of pandemic controls.Official purchasing to measure manufacturing activity The Reps Index rose to 50.1 from 47.0 in December.
But investors remain cautious, looking for more signs of recovery in the pandemic-hit economy. China’s blue chip CSI300 index fell 1% in afternoon trading after hitting a six-month high on Monday.
Hong Kong’s Hang Seng Index fell 1.23% on Tuesday, but was still set to record its best January performance since 1989.
U.S. stocks fell on Monday, with major indexes falling, weighed down by declines in technology stocks and other large corporate stocks.
The Dow Jones Industrial Average fell 0.8% to 33,717.09, the S&P 500 fell 1.3% to 4,017.77 and the Nasdaq Composite fell 2.0% to 11,393.81.
Despite Monday’s decline, the S&P 500 performed well, posting its biggest January gain since 2019.
At the end of the Fed’s two-day policy meeting on Wednesday, investors are looking for clues on whether the rate hike cycle may be coming to an end and signs on how long rate hikes will continue, with Chairman Jerome Powell. will be glued to the press conference. .
The market will also deal with a flood of US economic data that culminates in Friday’s January payroll report. Investors see signs of a weakening labor market as a key factor in keeping high inflation in check.
US Treasury Yield Holds Strong Ahead of Central Bank Meeting and Economic Data, Benchmark 10-Year Treasury Note US10YT=RR Yields at 3.5457% Compared to US Close of 3.551% on Monday bottom.
Two-year yields rose to 4.2424% against US closing prices of 4.261%, rising on traders’ expectations of Federal Reserve (Fed) interest rate hikes.
In currencies, the US dollar, which is expected to fall for four months, edged up at 102.29 against a basket of other major currencies.
The European single currency was little changed at $1.0841, up 1.3% over the month.
In energy markets, oil prices fell ahead of an expected rate hike by the central bank and signs of strong Russian exports.
US oil prices fell 0.44% to $77.56 a barrel. Brent crude fell to $84.85 per barrel.
Gold is slightly cheaper. For spot gold he traded at $1920.84 per ounce.
(Additional reporting by Ankur Banerjee; editing by Kenneth Maxwell and B.)