Title: Asia stocks skid with U.S. futures, euro holds gains

May 24, 2022 01:35AM ET

By: AnalysisWatch

Asian shares fell on Tuesday as relief from Wall Street's rise was punctuated by a drop in US stock futures and the euro remained near its highest level in months as the likelihood of an ECB rate hike in July diminished.

Nasdaq futures lost 1.5% afterer closing higher on Monday. Traders blamed a profit warning from Snap, which led to a 28% drop in shares of Snapchat, which owns Snapchat.

S&P 500 futures fell 0.9%, losing some of Monday's 1.8% gain. EUROSTOXX 50 futures fell 0.5 percent and FTSE futures slipped 0.6 percent.

The broader MSCI Asia-Pacific Index, excluding Japan, fell 0.8 per cent in early trade. Japan's Nikkei index fell 0.8 per cent and Chinese blue-chip stocks slipped 1.1 per cent.

Markets were relieved after US President Joe Biden said on Monday he was considering easing tariffs on China and Beijing continued to make promises to boost the economy.

Unfortunately, China's zero-tariff policy and related business closures have already done significant damage to the economy.

First surveys on manufacturing purchases in May.

Due to supply shortages, manufacturing in Japan grew at its slowest pace in three months in May and Toyota announced that it was scaling back its production plans.

Analysts also lowered their forecasts for US economic growth as the Federal Reserve appears confident of raising interest rates by one percentage point in the next two months.

The aggressive sentiment is likely to be rekindled this week by a series of Fed speakers and the minutes of the latest meeting scheduled for Wednesday.

The European Central Bank is also increasingly optimistic, with President Christine Lagarde surprising many by opening the door for a rate hike as early as July.

The euro closed at $1.0665 after rising 1.2% overnight, its best performance since early March. It now faces strong resistance at $1.0756, which can be seen on the chart.

The dollar's decline helped gold rally to $1.855 an ounce.

US crude fell 66 cents to $109.63 a barrel and Brent crude lost 70 cents to $112.74.