- Stocks Edge Higher, Yield Curve Inverts Further
- Australia, Japan shares and US equity futures climb higher
Stocks in Asia climbed Thursday and Treasuries held on to a rally that inverted the US yield curve by the most in four decades.
Shares in Australia and Japan opened higher. US futures rose, after Wednesday’s decline in the S&P 500 and Nasdaq 100 amid warnings from Federal Reserve officials that policy would tighten policy further.
Benchmark 10-year government bond yields in Australia and New Zealand fell, following Treasuries. The drop in US 10-year yields relative to short-dated bonds underscores investor concern about the risk of recession.
The moves followed the biggest increase in eight months for US retail sales, outpacing estimates and indicating Fed tightening has further to run to stymie inflation. San Francisco Fed President Mary Daly said a pause in rate hikes was “off the table,” and New York Fed President John Williams said the central bank should avoid incorporating financial stability risks into its considerations.
Goldman Sachs Group Inc. increased its forecast for peak US interest rates to 5.25% at the top of the range, up from the previous call 5%.
The dollar steadied following a volatile day in currency markets after a missile struck Poland, a NATO member. Polish officials said it was the result of Ukraine’s missile defense system rather than Russia, calming sentiment.
Elsewhere, European Central Bank policy makers may slow down their tempo of rate hikes, with only a 50 basis-point increase next month, according to people with knowledge of the matter.