Overnight
Wall Street closed in the red. The S&P 500 fell 0.77% to 7683.69 and the Nasdaq shed 0.92%, ending a two-day bounce. Tokyo's losses had already landed overnight with the Nikkei 225 dropping 0.73% to 65,877.62. European exchanges matched the mood: the FTSE 100 lost 0.1%, the DAX 0.13%. US Treasury yields powered higher—the 10-year now sits at 5.236%, up 1.34 basis points. That marks a five-month high and signals markets are pricing in stickier inflation and less appetite for a quick pivot to rate cuts.
Asia and Europe
Hong Kong's Hang Seng Index opened the morning up 0.54%, around 24,642.52, bucking the overnight selloff if only modestly. The resilience reflects selective buying in the region despite Wall Street's weakness. Tokyo's losses had already landed. European markets will open later to the signal from Wall Street's decline, and the higher yields climbing elsewhere may weigh on evening trading in London and Frankfurt, particularly in rate-sensitive sectors like utilities and consumer staples.
FX, rates and commodities
The dollar held its recent gains. USD/JPY fell 0.45% to 156.88 on light bids to lift the yen, while USD/HKD edged up just 0.01% to 7.8448—the peg holding steady. EUR/USD slid 0.22% to 1.1378, and GBP/USD inched up 0.08% to 1.3263. Gold sat steady at 4125, suggesting little safe-haven demand for precious metals. WTI crude held near 93.26 with no clear direction this morning. Bitcoin fell 0.95% to 83,456, tracked alongside equities as a risk asset.
The day ahead
The US will publish the PCE price index and durable goods orders. If both data points confirm sticky inflation, expect another leg higher in yields and further pressure on equities. Economic calendar will dominate sentiment this week; central bank language will matter less unless another policy surprise lands.
One number
5.236% — the US 10-year yield, now at five-month highs and the key level Hong Kong investors are watching as it affects carry trade profitability and property lending spreads.
One read
Read Bond yields at 20-year highs; Hong Kong feels the pressure for an explanation of how rising rates reshape local credit costs for developers and families.
