Asian stocks pull back as Fed rate cut expectations recede
Equities in the region are posting heavy declines on the day and that owes largely to a fall in expectations that the Fed will aggressively cut rates in its upcoming July meeting. This of course comes after the more steady US jobs report seen on Friday.
Odds of a 50 bps rate cut has been slashed from ~27% before the report to now just be ~3% and that's helping to keep equities on the back foot to start the day. The Hang Seng is down by 1.9% while the Shanghai Composite is down by 2.7% currently.
US equity futures are also lower by 0.4% amid weaker Treasury yields so the softer risk sentiment is what's playing out as we begin the European morning. USD/JPY holds near session lows at 108.30 as a result.
