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Stocks opened under pressure in Asia on Thursday after US shares declined and Treasuries flashed warning signs of the risk of recession.

Stocks declined in Australia, Japan and South Korea, while futures for Hong Kong rose. Contracts for US benchmarks fell after the S&P 500 posted a fifth day of losses, closing Wednesday near its 100-day moving average. 

Bonds rose in Australia early Thursday, sending the 10-year yield down 5 basis points to 3.31%. Treasury yields slid across the curve overnight, underscoring increased bets on the world’s largest economy falling into a painful downturn.

A key segment of the US curve reached a four-decade extreme, while 30-year yields sank to the lowest since September. Those moves remained largely intact in as trading resumed for the Asia session.

A gauge of the greenback was little changed after halting a two-day rally Wednesday. The offshore yuan fluctuated below the 7 level to the dollar as investors continued to focus on China easing Covid restrictions.

Ark Investment Management’s Cathie Wood said the bond market appears to show that the Federal Reserve is making a “serious mistake" with its monetary policy. Deflation is a much bigger risk than inflation, she noted in a series of Tweets.

Oil rose for the first time in five days. In recent days the market has shown weakness given signs of easing constraints for US fuel supplies and as risk-off sentiment gained momentum.

Key events this week:

ECB President Christine Lagarde speaks, Thursday

US initial jobless claims, Thursday

China PPI, aggregate financing, money supply, new yuan loans, Friday

US PPI, wholesale inventories, University of Michigan consumer sentiment, Friday

Some of the main moves in markets: 

Stocks

Futures on the S&P 500 fell 0.1% as of 9:27 a.m. Tokyo time. The S&P 500 fell 0.2%

Nasdaq 100 futures fell 0.2%. The Nasdaq 100 fell 0.5%

Nikkei 225 futures fell 0.4%

Australia’s S&P/ASX Index 200 fell 0.2%

Hang Seng futures rose 0.9%

Currencies

The Bloomberg Dollar Spot Index was little changed

The euro was little changed at $1.0509

The Japanese yen was unchanged at 136.62 per dollar

The offshore yuan was little changed at 6.9677 per dollar

The Australian dollar fell 0.2% to $0.6714

Cryptocurrencies

Bitcoin rose 0.2% to $16,871.62

Ether rose 0.2% to $1,234.26

Bonds

The yield on 10-year Treasuries advanced two basis points to 3.44%

Japan’s 10-year yield was little changed at 0.25%

Australia’s 10-year yield declined five basis points to 3.31%

Commodities

West Texas Intermediate crude rose 0.7% to $72.55 a barrel

Spot gold was little changed

 

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