EQUITIES

Asia-Pacific markets traded lower on Wednesday, led by Greater China stock indexes as COVID-19 concerns resurge in the country.

Worries about new COVID-19 cases in Shanghai risking fresh restrictions dragged the Hong Kong’s Hang Seng index, which was down 1.90%. Mainland China markets also declined as the Shanghai Composite shed 1.55%.

In South Korea, the KOSPI declined 1.62%, while in Australia, the S&P/ASX 200 was 0.35% lower. Japan's Nikkei meanwhile fell 1.11%, on course for its first loss of the week.

Overnight on Wall Street, The Nasdaq Composite ended the session 1.75% higher at 11,322.24, and the S&P 500 was up 0.16% at 3,831.39. The Dow Jones Industrial Average meanwhile shed 0.42%, to 30,967.82.

OIL

Oil pared earlier gains and dropped alongside broader markets after being pressured by the growing risks of an economic slowdown.

Brent crude futures was last down 1.64%, at $103.08 a barrel after rose as much as 2.9% in early trade. The U.S. WTI crude climbed to a session high of $102.14 a barrel, up $2.64, or 2.7%, after closing below $100 for the first time since late April. It was last down 0.24%, now at $99.31 a barrel.

Overnight, the Brent plunged 9.5% to a 2-1/2 month low, its biggest daily drop since March, while the U.S. oil benchmark plunged as much as 10%, breaking the $100 level on Tuesday stateside before settling 8% lower.

CURRENCIES

The U.S. dollar index hit a 20-year high of 106.623 on Wednesday, hoisted by a tumbling euro and declines in commodity currencies due to lower oil prices.

The benchmark U.S. treasury yields were flat on Wednesday, with the 10-year note at 2.836%. Overnight, it tumbled to one-month lows and a key part of the yield curve inverted for the first time in three weeks as economic worries dented risk appetite and increased demand for safe-haven U.S. debt. Longer duration yields are usually higher than shorter duration yields. But in previous session, the 2-year yield was last at 2.842, above the 10-year yield of 2.836.

Bitcoin hovering around the $20,000 level, unable to break significantly in either direction for the past month.

GOLD

Gold was flat on Wednesday after its overnight fall. It lost more than 2% on Tuesday, pushed to a seven-month as sharp gains in the dollar and rising interest rates sapped appetite for the non-yielding asset and sent prices tumbling.

Spot gold was last steady at $1,766.60 an ounce, and U.S. gold futures was at $1,763.40.

Spot silver firmed 0.4% to $19.27 per ounce, while platinum was flat at $865.48, and palladium gained 0.3% to $1,938.28.

ECONOMIC OUTLOOK

Asian stocks fell and the dollar stood high on Wednesday as investors' fears of recession deepened. Talk of gas rationing in Europe, a political crisis in Britain and a fresh flare up of COVID-19 cases in Shanghai also add to negative investors’ sentiment.

Traders are also keeping a watch on economic data, including a June nonfarm payrolls report expected on Friday, and on company commentaries for signs of peaking inflation and cooling economic growth, with another earnings season around the corner.

The release of ADP non-farm employment change data due to be released on Wednesday to gauge the state of the U.S. labour market. The final and most important data will come out on Friday with the release of non-farm payroll data, for further signs of whether the economy may fall into a recession.

Investors also are watching out for the U.S. Federal Reserve and European Central Bank minutes from their most recent policy meetings later today, bracing for another 75-basis-point rate hike by the Fed at the end of the month.

On Tuesday, data showed new orders for US-manufactured goods increased more than expected in May, reflecting that demand for products remains strong even as the Fed seeks to cool the economy. Separately, business growth across the eurozone slowed further in June and European natural gas prices surged again, reigniting worries of a recession in the bloc.