Stocks, US Futures Struggle; Bitcoin Retreats Anew: Markets Wrap

(Bloomberg) — Asian stocks fell Monday and US equity futures erased a climb as tightening monetary policy kept sentiment in check.

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MSCI Inc.’s gauge of Asia-Pacific shares hit the lowest since June 2020 amid drops in Japan and Hong Kong and mixed performance in China, where banks kept their main lending rates unchanged.

S&P 500 contracts turned lower, while those for the Nadsaq 100 reversed a gain of more than 1%.

Bitcoin slid anew, sinking back below the closely-watched $20,000 mark. A volatile crypto slump has become emblematic of the pressure on a range of assets from sharp Federal Reserve interest-rate hikes to tame high inflation.

The dollar was mixed against key peers. Crude oil added to a near-7% Friday plunge. Treasury futures advanced — there’s no cash trading as Wall Street is closed Monday for a holiday.

Markets are set to remain on edge amid elevated price pressures and concern that monetary tightening in a range of nations portends more losses.

“Data over the coming months will indeed point to the need for a greater degree of tightening, and market prices will need to adjust,” Sonal Desai, chief investment officer at Franklin Templeton Fixed Income, wrote in a note.

In the latest Fed commentary, Governor Christopher Waller said he would support another 75-basis-point rate increase at the central bank’s July meeting should economic data come in as he expects.

Bank of Cleveland Fed President Loretta Mester said the risk of a US recession is increasing, adding it will take several years to return to the 2% inflation goal. Fed Chair Jerome Powell is due to appear before US lawmakers this week.

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What to watch this week:

China loan prime rates, Monday

RBA minutes, Governor Philip Lowe due to speak, Tuesday

Fed Chair Jerome Powell semi-annual Senate testimony, Wednesday

Bank of Japan April minutes, Wednesday

Powell US House testimony, Thursday

US initial jobless claims, Thursday

PMIs for Eurozone, France, Germany, UK, Australia, Thursday

ECB economic bulletin, Thursday

US University of Michigan consumer sentiment,…

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