Asian Markets stutter; greenback takes a leap amidst US rate risk

8 Aug 2022 , 12:58 PM

Monday mayhems were visible in the Asian markets as they begin the day with slight downturns. On the contrary, US Dollar bolstered after a striking US Payrolls report pushed back against talk of recession but also strengthened the case for rate hikes.

Markets moved swiftly as there is a clear 70% chance that Fed Reserve will make a 75-bps rate hike in September, throwing two-year yields up 20 bps on Friday, and further tilting the curve downwards.

The data only raised the stakes for the June U.S. consumer prices report, which is due on Wednesday and could show a slight contraction in headline growth but a further acceleration in core inflation.

US Dollar strengthened against the Indian Rupee at Rs79.59 per Dollar against the previous close of 79.24/$.

The greenback was at 135.34 Yen after jumping 1.6% on Friday.

Analysts believe that despite slow growth and expected slides in July CPI gain, Fed is likely to make a 75-bps hike in policy rates in the September meeting.

Equity markets witnessed the pressure of US rate hikes with S&P 500 Futures and Nasdaq Futures slipping 0.16% and 0.50%, respectively.

However, after a dim morning session, Asian markets showed a slight recovery as Australia ASX was trading 0.13% higher. While, Shanghai SE Composite was also up marginally.

BSE Sensex also recovered to reflect a gain of 0.46%. The Nikkei set its position in the green territory with a 0.27% surge.

Hang Seng recorded a decline of 1.04%. Taiwan TSEC was trading 0.10% lower.