Title: Asian shares slip, dollar firm as investors await ECB

Jun 09, 2022 02:41AM ET

By: AnalysisWatch

On Thursday, Asian stocks fell, U.S. bond yields rose, and the dollar rose to a two-decade high against the yen as investors worried about the impact of interest rate hikes ahead of the European Central Bank meeting later in the day.

Asia's cautious tone seemed to carry over to European markets, where stock futures indicated that all markets would open lower.

ECB 50 futures, German DAX futures, and FTSE futures were trading around 0.4-0.5% lower across the region.

While investors speculate on the extent and pace of ECB tightening, they are also awaiting Friday's U.S.

consumer price data, which the White House said will be "strong." According to a Reuters poll, annualized inflation is expected to be 8.3%.

Although Asian stock markets rose about 9% from a two-year low last month, investors are still concerned that a tightening of central bank policy to control inflation could lead to a slowdown in the economy.

In Japan, the Nikkei stock index rose 0.04%.

Overnight, the Dow Jones Industrial Average fell 0.81%, the S&P 500 fell 1.08%, and the Nasdaq Composite fell 0.73%.

The anticipation of U.S. price data also weighed on U.S. Treasuries, with yields rising after Wednesday's weak auction of 10-year bonds.

On Thursday, US 10-year yields rose to 3.0344% US close Wednesday was 3.029% and 2-year yields to 2.7887% US close Wednesday was 2.774%.

Rising interest rates supported the dollar, especially against the yen, which fell to a 20-year low at 134.56 before recovering slightly.

The global dollar index held steady at 102.51, while the euro was unchanged at $1.0719 ahead of the ECB meeting.