Macro update
Wall Street extends sell-off: Rising Treasury yields, mounting debt concerns and higher crude prices kept investors on the sidelines, with the Dow falling 0.63%, the S&P 500 down 0.45% and the Nasdaq 0.78% lower as every sector except energy declined.
Fed hike all but certain: Markets are pricing in a 93% chance of a 25-basis-point rate increase on Wednesday, which would be the first US hike in more than three years, following hotter inflation data and a near 25% surge in crude prices over the past two weeks.
Treasury yields breach 5%: The benchmark 10-year yield climbed to its highest level since 2007 as expectations of higher rates pushed global bond yields higher, increasing pressure on heavily indebted borrowers, including companies with major AI investments.
Asian shares steady: MSCI’s broadest index of Asia-Pacific shares excluding Japan rose 0.5%, ending a four-day losing streak as South Korean and Taiwanese stocks led gains, while the 10-year Treasury yield slipped back below 5%.
Oil retreats after rally: Brent fell 0.6% to around $108 a barrel and WTI dropped to $104.73 as a larger-than-expected build in US crude inventories offset ongoing supply disruptions caused by attacks on Saudi energy infrastructure.
Dollar holds near highs: The US dollar remained close to multi-week highs ahead of the Fed decision, reaching a one-week peak of ¥155.43 against the yen, while sterling traded at $1.3478 ahead of Thursday’s Bank of England meeting.
