(Reuters) – SingaporeBetter-than-expected results from Microsoft (NASDAQ:MSFT) and Google helped calm stock markets on Wednesday, but bonds and the dollar were still on edge before a U.S. Federal Reserve meeting where another big rate hike is expected.
In Asia, the Nasdaq 100 futures went up 1.5% and the S&P 500 futures went up 0.9%. This was because Microsoft predicted strong growth in revenue and Google’s parent company, Alphabet (NASDAQ:GOOGL), reported strong sales of search engine ads.
Alphabet shares went up 5% after hours, and Microsoft shares went up 4%. This helped lift some of the gloom caused by Walmart’s (NYSE:WMT) profit warning and weak U.S. economic data.
European futures increased by 0.2 percent, while FTSE futures increased by 0.3 percent.Japan’s Nikkei rose 0.4 percent .
Things weren’t as good in other places. MSCI’s biggest index of Asia-Pacific stocks other than Japan fell by 0.7%.
The second-largest chipmaker in the world, SK Hynix, said that customers were cutting back on spending, which would likely cause demand to slow.
As a new cut in Russian gas flows loomed, it was hard for the euro to make up for its drop from the night before. The International Monetary Fund has cut its predictions for global growth, and traders think that the Fed will raise interest rates sharply in a few hours.
Khoon Goh, head of Asia research at ANZ Bank in Singapore, said, “They have laid out their plan to raise rates to restrictive levels.” “Of course, they want to avoid a hard landing, but they can’t take the chance that inflation will stay high.”
At 1800 GMT, the U.S. central bank is likely to say that rates will go up by 75 basis points (bps). Futures show that there is about a 15% chance of a 100 bps hike. The Treasury market already knows that so many sharp hikes in the near future will hurt growth in the long run.
Benchmark On Wednesday, the yields on 10-year Treasury bonds stayed the same at 2.8032 percent, which is lower than the yields on 2-year bonds, which were 3.0508 percent. [US/]
The data on consumer prices surprised on the downside for a change, even if it was only by a small amount. This made investors change their minds about betting on a 75 bps rate hike in Australia next week.
The Australian dollar went down a little bit at $0.6935. Futures for three-year bonds went up by 11 ticks. [AUD/]
Europe and China are shaky.
On top of worries that rising interest rates will hurt economies, Europe is in the middle of an energy crisis, and China is dealing with strict COVID-19 rules and more setbacks for its already struggling real estate market.
Tuesday was the worst day for the euro in two weeks. It fell 1% because Russia’s Gazprom (MCX:GAZP) said it would cut westbound gas flow even more, and energy prices shot up, with German year-ahead prices hitting a record high. [NG/EU] [EL/DE]
In Asia, the value of the common currency stayed at $1.0150. The dollar was still worth 136.96 yen. [FRX/]
China’s yuan was under pressure, and property stocks fell because investors were afraid that a growing boycott of mortgage payments on unfinished apartments and crippling debts at many developers could spread to the banking industry.
The onshore CSI real estate index dropped 2%, and a Hong Kong index of mainland developers dropped more than 5%. This was because a big developer, Country Garden, said it would sell shares at a discount.
Analysts at Societe Generale said, “China’s housing market is in the middle of a depression, and the recent mortgage boycott is a sign of how bad the slump is” (OTC:SCGLY).
“As of now, the size of this boycott is not too big to handle, but it could get worse.”
Brent crude futures stayed at $104.58 a barrel, and U.S. crude futures went up 0.3% to $95.32 a barrel. [O/R]
The price of an ounce of gold stayed at $1,717. [GOL/]
