Asian markets fell ahead of the Fed policy decision, tracking losses on Wall Street

Supply and demand fundamentals for oil are “very good,” but Pickering Energy Partners expects further volatility.

“Sentiment is nervous, and generally we’re upbeat, but you should expect some more volatility over the next couple of months as we sort out the economy,” said Dan Pickering, the company’s CIO.

Brent crude futures were down 0.17% at $75.19 a barrel, while US West Texas Intermediate futures were down 0.21% at $71.52 a barrel.

– Lee Ying Shan

of Australia Initial retail sales It rose 0.4% month-on-month in March, more than February’s high of 0.2%, government data showed on Wednesday.

The discretionary retail sector appeared to be under more pressure, with household goods falling 0.4% and clothing, footwear and personal accessories falling 1%. Department store retail sales also fell 0.2% from a month ago.

Food retail sales led retail growth largely driven by the high food inflation seen in the Australian economy.

– Jihye Lee

Iris Pang, ING’s chief economist for Greater China, lowered her growth forecast for Hong Kong, a day after the city reported GDP growth of 2.7% in the first quarter.

Speaking to CNBC’s “Squawk Box Asia,” Bong said he “probably sees a recession in the fourth quarter” in the U.S. and expects the Fed to cut rates by 100 basis points by the end of 2023.

As a result, prospects for Hong Kong and China’s main exports in the second half of the year “may not be bright”.

Bong lowered his outlook for Hong Kong in the second half, bringing his full-year GDP growth to 2.9%.

– Lim Hui Jee

Reserve Bank of Australia Governor Philip Lowe “Uncomfortably stable” services inflation, he said One of the main reasons was that the Reserve Bank of Australia raised interest rates by 25 basis points to 3.85% at its Tuesday meeting.

In a speech on Tuesday evening, Lowe explained that inflation in Australia had passed the peak, but said it would be some time before inflation returned to the RBA’s target range of 2-3%.

He also sees “worryingly stable” services inflation overseas, conceding that goods inflation is slowing but services and energy inflation remains high.

“Circumstances may be different in Australia, but experience overseas points to an upside risk, particularly in countries with high levels of inflationary dynamics recently,” Lowe said.

– Lim Hui Jee

Bank of Korea Governor Ri Sang-yong says it’s too early to start talking about interest rate cuts.

South Korea’s central bank became the first in Asia to pause its tightening cycle, fueling market speculation that it will start cutting rates soon. But those expectations are “premature,” Rhee told CNBC’s Cheri Kang at the Asian Development Bank’s annual meeting.

“We made it clear that our core inflation is still above our target, and our inflation is going below 4% in April, so it’s coming down,” Rhee said on Wednesday.

“But still, because it’s over the target, we’ll have to wait and see and I think it’s a bit premature to talk about it. [a] Pivot at this point.”

– Jihye Lee

of New Zealand The unemployment rate held steady at 3.4% In the first quarter, unchanged from the last quarter of 2022. This was slightly lower than economists’ expectations of 3.5%.

The unemployment rate rose 0.2 percentage points from 3.2% a year ago.

The country’s labor force participation rate stood at 72%, up 0.2 percentage points from the previous quarter and one percentage point higher than the 71% recorded in the first quarter of 2022.

– Lim Hui Jee

Jefferies expects shares of global commercial real estate stocks to rise more than 60% over the next 12 months.

The investment bank’s forecast comes at a time when prices in the global commercial real estate market have fallen sharply over the past year.

However, the property company is expected to survive the downturn as it nearly doubled the rents charged to its tenants.

CNBC Pro subscribers can read more here.

– Ganesh Rao

The price of lithium, a key ingredient used in electric vehicle batteries, rose again for the first time in months.

Analysts were generally bullish on the sector for the long term.

For investors looking to play the EV-related sector, CNBC screened lithium and battery stocks with buy ratings from more than 70% of analysts, and an average price target of at least 15%.

CNBC Pro subscribers can read more here.

– Weissen Don

Goldman Sachs says investors haven’t fully moved on from March’s banking crisis as banking stocks traded lower on Tuesday. Analysts at the firm noted that market concerns were quickly eased by a deposit injection at First Republic Bank following the failures of Silicon Valley Bank and Signature Bank in March.

“Since bottoming out at 3808 on March 13, the S&P 5000 has gained nearly 10%. [as of] Monday night eased bank tensions and a strong earnings season (so far) and a growing consensus that the Fed will soon pause its annual rate hike cycle,” several Goldman analysts wrote in a Tuesday note.

“But today, we’re seeing some return to March concerns following JPM’s takeover of FRC on Monday. Regional bank stocks are down 4% to 13%. [Managing director Richard] “The transaction highlights that Ramsden sees the JPM takeover and that G-SIPs will be allowed to bid on FTIC transactions even if they are above the deposit limit,” the note continued.

– Hakyung Kim

Eric Rosengren thinks his former colleagues at the Federal Reserve would be making a mistake if they raised interest rates again on Wednesday.

The former Boston Fed president, who will retire from the board in September 2021, told CNBC on Tuesday that turmoil in the banking sector and an economic slowdown should push policymakers to end the rate hike campaign that began in March 2022.

“My own view is that the economy is likely to slow down in the second half of the year, and there is no need to raise rates until we have a better view of what the second half of the year will look like,” Rosengren said on “Squawk Box.”

According to the CME Group’s FedWatch tracker, traders in the futures market are pricing in a 96% chance.

– Jeff Cox

WTI crude fell 5.29% to $71.66, marking its lowest settlement since settling at $69.26 on March 24. WTI crude is down 10.7% in 2023.

Brent crude and natural gas also fell by 5.03% and 4.49% respectively. Brent crude was down 12.33% year-to-date, trading at $75.32 on Tuesday. Meanwhile, natural gas has fallen more than 50% to 2023.

– Hakyung Kim

Oil prices fell sharply on Tuesday following an unexpected contraction in Chinese factory activity reported on Sunday and ahead of expected interest rate hikes from the Federal Reserve and the European Central Bank this week.

Brent crude futures were down 4.3% at $75.87 at 10:53 a.m. ET, while West Texas Intermediate crude futures were down 4.4% at $72.34 — their lowest since late March.

The drop came despite news that OPEC oil production had fallen in April Reuters survey.

Job openings fell to their lowest level in nearly two years in March, a sign that the labor market is easing, the Labor Department said on Tuesday.

Openings totaled 9.59 million, the lowest since April 2021 and below the FactSet estimate of 9.64 million, according to the Jobs and Labor Turnover survey.

The Federal Reserve is closely watching the JOLTS report for signs of a labor slowdown. A decrease in job openings is positive for inflation because it helps put less pressure on wage increases.

The full story can be found here.

– Jeff Cox