Asian markets dip as Wall Street wobbles

“When you have those [sorts] of volatility in the food and energy components, the worry is that if it’s persistent, then it does tend to bleed into core inflation measures over time.”

Oil prices extended gains on Wednesday. Brent crude futures settled 0.3% higher at $92.31 a barrel, nearing a 10-month peak that it hit a session ago, while US West Texas Intermediate (WTI) crude futures were up 0.3% at $89.13.

On Wall Street, the S&P 500 fell 0.6% overnight, the Nasdaq declined 1% while Dow Jones was mostly flat.

Apple dropped 1.8% after unveiling new iPhones while not increasing prices as it faces a global smartphone glut, and Oracle shares tumbled more than 13% after the cloud-services provider forecast current-quarter revenue below targets.

The euro was supported at $1.0753, nearing one-week highs on the Reuters story, while markets moved to favour a rate hike from the ECB on Thursday with a 75% probability, compared with a split chance previously.

“The leak raises the possibility of a hawkish hike, which would be much more supportive for the [euro],” said Steve Englander, global head of G10 FX research at Standard Chartered, referring to the Reuters report.

“Our baseline view is that the ECB will signal a hawkish hold and be deterred by soft growth from further hikes … We think it is a close call.”

The US dollar recovered some of its recent losses against the yen, up 0.2% to 147.35 yen after comments from Japan’s top central banker on a possible early exit from its negative interest rate policy sent the Japanese currency soaring.

Treasury yields climbed on Wednesday, with the two-year note touching 5.0263%, compared with a US close of 5.005%. 10-year yields held at 4.2842%, up from the close of 4.264%.

The gold price was flat at $1,911.29 per ounce.