The Bank of Korea held interest rates at 3.50% on Thursday, after raising them steadily for over a year due to mounting economic risks from high inflation, weakened exports, and a slowdown in the housing market. Although inflation in South Korea surged over the past year, it has since retreated but remains at relatively high levels, leading to increased pressure on consumer spending and a shrink in the country's fourth-quarter GDP. The central bank's pause in rate hikes is seen as a step towards fostering economic growth. Meanwhile, Asian stock markets saw slight gains driven by Nvidia's better-than-expected revenue. However, investors remain concerned about interest rates staying high to control inflation, leading to the worst week of the year for Wall Street indexes.

EQUITY

The stock market lost ground for a fourth consecutive day on Wednesday, and the minutes from the Federal Reserve's January-February meeting showed officials agreed to slow rate hikes to a quarter of a percentage point and that the risks of high inflation were a factor in policy. Money market participants predict rates will peak at 5.35% by July, and the Federal Reserve's terminal rate could reach 5.5%.

GOLD

Gold prices were mostly unchanged on Thursday but have declined for the week due to a strong US dollar that has been bolstered by expectations of a hawkish Federal Reserve. On the demand side, it was reported that Turkey bought the most gold in 2022 from the Swiss but was curtailed due to earthquakes in the region.

OIL

Oil prices dropped by 3% on Wednesday, the most in two weeks. Economic data showed signs of weak demand for oil, with sales of existing homes at their lowest since 2010 and U.S. crude stockpiles increasing. The American Petroleum Institute reported a 9.895-million-barrel increase in crude stockpiles, and the consensus is expecting a 2.083 million barrel increase from the U.S. Energy Information Administration on Thursday.

CURRENCY

Most Asian currencies recovered recent losses as the dollar saw some profit taking. The South Korean won was the best performer despite the Bank of Korea holding interest rates after 18 months of hikes. Rising interest rates bode poorly for Asian currencies, but there is hope for recovery if U.S. economic data shows strength. Keep an eye on the revised reading of U.S. Q4 GDP and the Personal Consumption Expenditures (PCE) Price Index due on Friday.