South Korea’s Kospi declined 0.92% and shares in Australia slipped S&P/ASX 200 dropped 1.67%. Mainland Chinese stocks were mixed as the Shanghai Composite declined 0.12% and the Shenzhen component edged fractionally higher.
On the economic front, China on Monday announced that the 1-year Loan Prime Rate (LPR) was kept unchanged at 3.85% while the five-year LPR was also held steady at 4.65%.
Meanwhile, US equities witnessed a steep correction last week with Dow and S&P 500 declining in the range of 1.9%-3.5% as slight hawkish remarks of the Federal Reserve in the FOMC meeting weighed on investors’ sentiments.
Federal Reserve indicated two rate hikes in 2023. Further, the flattening yield curve in the USA, wherein the spread between short-term papers and long-term bond yields are contracting, indicates a higher interest rate scenario.
For the week, the speech of the Federal Reserve Chairman before Congress on Tuesday will be important for the markets. Further, several Fed officials are scheduled to speak this week, which will also be in focus. Additionally, data of Personal Consumption Expenditures for May will be monitored.
Further, European markets are expected to open sharply lower following jitters in global markets over the more hawkish tone from the U.S. Federal Reserve last week.
London’s FTSE is seen opening 51 points lower, Germany’s DAX down 141 points, France’s CAC 40 down 34 points and Italy’s FTSE MIB 341 points down.