Asian Indices Shred Losses, Bonds Extends Sell-Off amid Heightened Geo-Political Tensions

Asian equities tracked losses of Wall Street and other global indices overnight, while oil extended gains amid elevated concerns on inflation and geo-political tensions.

Markets are roiling as Federal Reserve officials signal they won’t shy away from more-aggressive action to tame the fastest inflation in four decades. Commodity prices have staged erratic rallies amid supply pressures and sanctions as Russia’s attacks on Ukraine show no sign of abating, and mounting concerns about the impact on the global economy leave investors struggling to identify havens.

The CSI300, HSI, KOSPI and TOPIX inched down by 1.19%, 0.58%, 0.68% and 0.99% respectively.  The MSICI Asia Broad Market Index ex Japan higher by 0.86%.

Treasuries dipper again and resumed unprecedented losses. The yield on the U.S. 10-year is at 2.3%.

“Markets are really latching onto these short-lived themes and that’s causing significant price movement,” Tracie McMillion, head of global asset allocation strategy at Wells Fargo Investment Institute, said on Bloomberg Radio, as reported by Bloomberg.

“We think that for the near term we are probably going to be able to avoid a recession but we are growing a little bit more concerned about 2023.”

The U.S.-China trade wear upticks as the Biden Administration plans to reinstate exemptions from Trump-era tariffs on about two-thirds of Chinese products that were previously granted waivers, most of which expired by the end of 2020.

Russian President Vladimir Putin on the other hand pressing dozens of countries use the local currency for natural gas purchases. This has sent European gas price on cutting gains while Ruble had the biggest one-day gain.

Crudes gained with WTI trading around $115 a barrel while Brent is trading around $123 a barrel.