Asian shares tumble as markets watch for US inflation information

© Reuters. FILE PHOTO: People wearing protective masks during the coronavirus disease (COVID-19) outbreak are reflected on an electronic board displaying Japan's stock prices outside a brokerage in Tokyo, Japan, Oct. 5, 2021. REUTERS / Kim Kyung-Hoon

From Alun John

HONG KONG (Reuters) – Asian stocks and European futures slipped on Friday as traders moved away from riskier investments amid renewed COVID-19 concerns and caution over key US inflation data that also kept currencies in check.

MSCI's broadest index for Asia Pacific stocks outside of Japan fell 0.6%, gained three days, and lost 0.5%.

In early European trading, the Pan Region fell 0.53% and futures lost 0.46%

Stocks and risk-friendly currencies had done well earlier in the week, with MSCI's regional benchmark posting its best day in two months on Tuesday, aided by evidence that the Omicron strain of the new coronavirus may not be as economically disruptive as initially feared.

Despite the declines on Friday, the index is still up 1.7% this week.

"However, when we learned towards the end of the week that Europe has gone much more clearly into some sort of lockdown-lite and the COVID-19 case numbers in the US are starting to turn things up a bit," said Rob Carnell, Asia-Pacific director of research at ING.

"Plus there's a slight sense of 'let's not have too much risk on the table at the weekend'. Of course there is a CPI in the US – but I think we all realized it Inflation there. " now in the US, "he added.

The US consumer price index (CPI) for November is expected later on Friday, and a Reuters poll of economists suggests it rose 6.8% year-over-year, overtaking a 6.2% increase in October , which is the fastest increase in 31 years.

Any upside surprise is likely to be interpreted as an argument in favor of a faster Fed throttling and favoring expectations for rate hikes.

Elsewhere, China Evergrande Group's shares lost 1.5% after Fitch downgraded them to the restricted default status.

Contagion was limited, however, and a Hong Kong-listed index tracking mainland developers lost just 0.36%, beating the local benchmark of 0.66%.

Markets in general have been much less affected by recent developments in the long-running Evergrande saga than they were a few months ago.

"This problem has been going on for two and a half months and the markets don't seem so excited because a default on Evergrande's offshore debt seemed very likely," said Shane Oliver, head of investment strategy at AMP (OTC 🙂 Capital.

In China, too, the central bank on Thursday instructed financial institutions to hold more foreign currency in reserve for the second time this year, which the markets interpreted as an attempt to curb the recent rapid appreciation of the yuan.

As a result, the yuan lost around half a percent in offshore trading on Thursday. It was volatile on Friday, most recently at 6.3697.

Other currency movements were dampened. It held ahead of the CPI data and was heading for its seventh straight weekly increase, the longest since mid-2014.

The euro also took a breather after rising 0.7% on Wednesday in line with overall risk-free sentiment, before falling 0.4% on Thursday as sentiment began to turn.

Risk aversion caused longer-dated US Treasury bond yields to fall slightly overnight before stabilizing. The last benchmark was 1.4888%.

The two-year return remained elevated at 0.7086%.

Oil also lost ground on Friday, but like stocks, it was headed for a weekly gain. declined 0.14% to $ 70.84 a barrel. fell 0.2% to $ 74.27. (OR)

Gold, on the other hand, climbed higher. The spot price rose 0.16% to $ 1,777.3 per ounce. (GOL /)

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