SINGAPORE — Asian stock markets slipped for an eighth straight session on Wednesday, and the dollar loomed large as fresh hawkish comments from a Federal Reserve official kept investors cautious ahead of this week’s Jackson Hole symposium.
Minneapolis Federal Reserve Bank President Neel Kashkari was the latest official to reiterate the Fed’s focus on controlling inflation ahead of all else, and said on Tuesday his biggest fear was underestimating the extent of price pressures.
MSCI’s index of Asian shares outside Japan fell 0.2% in morning trade, on track for the index’s eight successive daily drop, if sustained. Japan’s Nikkei fell 0.6%.
Wall Street steadied overnight after two days of heavy losses, as soft U.S. data tempered rate-hike worries. The data also eased pressure on short-dated U.S. Treasuries.
U.S. services and manufacturing surveys had disappointed on Tuesday and July new home sales fell to a 6-1/2 year low.
“In some ways it’s good news, the softer the data is now, the less the Fed has to do,” said ING economist Rob Carnell, but he said there weren’t too many reasons to expect a shift in tone from the Fed at this week’s Jackson Hole symposium.
“It might be a bit early to be jumping that gun just yet…if you start to give the market a little sop that it might get better in time you might end up undermining your own approach.”
S&P 500 futures fell 0.3% in Asia and European and FTSE futures also eased a bit.
Brent crude futures are hovering around $100 a barrel on signs of U.S. demand and Saudi Arabia’s talk of supply cuts. The higher oil price helped prop up energy stocks in Australia.
With little on the calendar ahead of the Jackson Hole symposium, moves elsewhere were slight and the dollar held near a two-decade high on the euro.
The Australian and New Zealand dollars drifted about 0.5% lower, pushing the Aussie to $0.6897.
The euro, which made a brief trip above parity on Tuesday, was struggling at $0.9950 as markets see soaring energy prices setting off another round of inflationary pressure that will take a bite off growth.
It had hit a 20-year low of $0.9901 on Tuesday.
The Chinese economy is also sputtering and modest interest rate cuts have only drawn attention to weakness in the property sector and the lack of confidence and credit demand.
The yuan fell about 0.2% to 6.8519 per dollar. The Hang Seng fell 0.9% and onshore blue chips fell 0.7%.
(Editing by Ana Nicolaci da Costa)