ALBAWABA – Asia-Pacific stocks slid Thursday, according to Reuters, ahead of the United States (US) Federal Reserve’s (Fed) July meeting, in anticipation of further interest rate hikes, as US Secretary of Treasury Janet Yellen visits Beijing amid rising US-China tensions.
APAC investors are reportedly bracing for higher rates and holding for some relief on the US-China trade and tech war front, Reuters reported.
Fingers crossed
Multiple US labor market reports are due Friday and Saturday, chief among which is Friday’s non-farm payrolls report.
These reports indicate in part the status of the economy, with higher employment and wages signalling still-rising inflation.
May reports and preliminary readings in June pointed to cooling labor market, which usually means a deceleration in inflation. But these readings may not be enough to sway Fed hawks to end the hike cycle, which started in March 2022.
On US-China tensions
Meanwhile, the US Treasury secretary touches down in Beijing to start a three-day visit in a bid to ease US-china tensions.
It may be hot in China’s capital, but the policymakers from both countries will have to break a huge chunk of ice before engaging in any meaningful discussions moving forward, as described by Reuters.
US-China tech and trade war: Export restrictions boost stocks of local chips-metal producersChina claimed it is not targeting any particular country, but the US – along with allies in Japan and the Netherlands – has ramped up restrictions on chip-tech trade with China for months.
