Asian equity futures are expected to open on a cautious note as investors eagerly await the release of consumer and producer price data from China, which is predicted to reflect continuing economic frailty. The trading contracts for Australia and Japan have slightly dipped, while those for Hong Kong saw a minor decline by 0.3%.
US-listed Chinese stocks experienced a substantial drop of 2.4% following an unexpected plunge in trade figures that exacerbated worries about the state of the world's second-largest economy. The difficulties faced by Country Garden Holdings Company Ltd (HK:2007), previously China’s largest developer, added to the prevailing pessimism.
US shares managed to limit their losses as buyers took advantage of lower prices after initial worries about financial stability and economic health caused market jitters.
Treasuries witnessed an uptick due to favorable reception at a three-year note auction. Concurrently, amidst growing concerns ranging from China’s future outlook to the reliability of US and Italian banks, demand surged for safe-haven assets like the dollar - pushing it towards its highest mark in over a month.
Despite afternoon recovery efforts on Wall Street that reduced stock declines with S&P 500 finishing down only by 0.4%, market uncertainty remains high overall. Apple Inc (NASDAQ:AAPL), however, broke its losing streak this year while Eli Lilly's (NYSE:LLY) sales surpassed expectations, buoying healthcare sector performance.
Moody’s Investors Service added fuel to the banking sector's (NYSE:KRE) woes when they downgraded ten small-scale American lenders hinting at possible similar actions towards major firms.
Yields on Treasury 10-year notes fell around 4% following Tuesday's $42 billion sale which fetched lower-than-expected yield indicating stronger demand than anticipated.
Among speeches, Fed Bank President Patrick Harker hinted at ceasing rate hikes if there aren't any surprises within the economy while maintaining elevated rates momentarily before considering reduction next year, an opinion echoed by his Richmond counterpart Thomas Barkin who felt it was premature discussing September increase prospects now.
Wednesday also observed a marginal fall in oil prices after Ukraine threatened retaliation if Russia continues blocking ports.
Copper - Often considered a global economy indicator - also declined, reflecting disappointing Chinese trade numbers.