Weak corporate reports from tech companies weigh on stock indices. Japan’s Nikkei 225 is falling as the yen rises above 150

Other economic data showed that US new home sales for September rose by 12.3% m/m to a 20-month high of 759.000, beating expectations of 680.000. This is a positive factor for the dollar index.

In his speech on Tuesday, Fed Chairman Jerome Powell noted that the continued strength of the economy, which threatens to spur inflation, is one of the main concerns that could force the Fed to raise rates again. However, there is a 2% chance that the Fed will continue raising rates on November 1.

On Wednesday, the Bank of Canada left its key overnight rate unchanged at 5.0%. In its statement, the Bank of Canada noted that past rate hikes have dampened activity and slowed inflation, emphasizing that consumption and business investment are weakening. Policymakers also recognize that supply and demand in the economy are coming into balance. In theory, this should help reduce price pressures in the future. On planning, the central bank maintained a hawkish stance, making it clear that the Governing Council is prepared to continue raising borrowing costs if necessary, especially given the slow progress in achieving price stability and because of the rising risks of a new spike in inflation.

In the Middle East, Qatar’s foreign minister said that negotiations to free hostages held by Hamas were progressing well and a breakthrough could be reached soon. Diplomatic efforts to prevent the conflict between Israel and Hamas from spreading in the Middle East have recently intensified. But Israel’s prime minister said yesterday that the army is still preparing for a ground operation in Gaza, causing investors to once again resort to buying gold as a protective asset.

WTI crude oil and gasoline prices went up on Wednesday on speculation that Israel will soon launch a ground attack on the Gaza Strip, which could lead to a widening conflict in the region, disrupting oil supplies to the Middle East.

Asian markets were predominantly up yesterday. Japan’s Nikkei 225 (JP225) rose by 0.67%, China’s FTSE China A50 (CHA50) added 0.58%, Hong Kong’s Hang Seng (HK50) ended the day up by 0.55%, and Australia’s ASX 200 (AU200) ended Wednesday negative by 0.04%. But most Asian stocks fell sharply at the open of trading on Thursday, with regional tech stocks following their US counterparts lower, while a jump in bond yields and uncertainty over Japan’s monetary policy led the Japanese Nikkei 225 (JP225) to lead the losses. A 2% jump in yields on 10-year Japanese paper weighed on local equities, as well as a weakening yen that crossed the 150 mark, bringing the Japanese currency close to a 33-year low. The jump in yields and the weakening yen have added to fears that the Bank of Japan will consider tightening its policy at next Tuesday’s meeting. Earlier this week, there were reports that the BoJ is considering tightening its yield curve policy amid mounting pressure from debt and currency markets.

Australia’s ASX 200 Index (AU200) has fallen by 1% since the open as data showed a sustained decline in export prices in the third quarter. Rising expectations of an interest rate hike by the Reserve Bank are weighing on Australian equities.