SINGAPORE- Asian shares slipped on Wednesday as a stellar rebound in world stocks paused for breath, while bond yields and the dollar fell ahead of US economic data and speeches from policymakers that are expected to make the case for interest rate cuts.
The S&P 500 snapped eight sessions of gains with a 0.2 percent overnight drop. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.5 percent . US and European futures each drifted about 0.2 percent higher.
Hong Kong’s Hang Seng slid1 percent with JD.com dropping 10 percent as top shareholder Walmart moved to sell its large stake.
Japan’s Nikkei fell 1 percent at the open as a recovery from its collapse in early August runs into resistance around the 38,000 level, but it recovered to trade 0.3 percent lower in the afternoon.
“The sell-off itself has largely corrected, and the recession scare has given way to soft landing hopes again,” said Bank of Singapore analyst Moh Siong Sim.
“But now we are back to square one and … the market needs validation before it can be more relaxed, and that validation must come from data.”
Later on Wednesday preliminary revisions to US labor data are due to be published and a large downward revision is expected, which would support cutting interest rates. Federal Reserve minutes are also expected to reinforce a dovish stance.
On Thursday, US and global purchasing managers’ index surveys are due.
The falling dollar has launched gold to record highs and returned the yen to 145.67 per greenback, a gain of 1.6 percent for the week so far and some 11 percent higher than last month’s 38-year trough.
The euro is up nearly 3 percent for August to date and, at $1.1132 in Asia trade, is at its highest since early December and testing major chart levels.
Interest rate futures have priced in a 25 basis point (bps) US rate cut next month, with a 1/3 chance of a 50 bps cut. Almost 100 bps in cuts are priced in for this year, and another 100 bps next year.
