EQUITIES

Asia-Pacific markets were mostly lower on Wednesday. The Nikkei 225 in Japan dropped 2.25% to lead the losses regionally. The South Korea’s KOSPI fell 0.75%, the ASX 200 in Australia was down 0.87%.

The Shanghai composite in the mainland China fell 0.29%, and in Hong Kong, the Hang Seng index traded just above the flatline.

Overnight on Wall Street, the Dow Jones Industrial Average slid 1.51%, the S&P 500 fell 1.84% and the Nasdaq Composite slipped 2.60% to close almost 10% below its record closing high on Nov 19, which would confirm a correction.

OIL

Oil prices rose for a fourth day to a seven-year high as investors worried about global geopolitical tensions involving major producers could exacerbate the already tight supply outlook. An outage on a pipeline from Iraq to Turkey also added to worries.

Yemen’s Houthi rebels claimed responsibility for a deadly attack in Abu Dhabi earlier this week, leading to fresh tensions in the region and worries about possible supply disruptions. The UAE vowed to retaliate against them.

Meanwhile, Russian troops are lined up on the border of Ukraine, with the White House calling the crisis extremely dangerous and saying Russia could invade at any point.

Turkey's state pipeline operator Botas said on Tuesday that it cut oil flows on the Kirkuk-Ceyhan pipeline after an explosion on the system. The cause of the explosion is not known. The pipeline carries crude out of Iraq to the Turkish port of Ceyhan for export.

The Brent now traded at $88.58 per barrel, and the U.S. crude futures traded at $86.57 per barrel.

Overnight, the Brent futures ends at $87.51 a barrel, while the WTI crude oil prices closed to $85.43 per barrel.

CURRENCIES

The yield on the 10-year Treasury note was at 1.884% on Wednesday, at its highest level in 2 years, after beginning the new year at around 1.5%. The 2-year rate, which reflects short-term interest rate expectations, topped 1% for the first time in two years.

The dollar index, which tracks the greenback against a basket of currencies of other major trading partners, was up at 95.675, hovered near one-week highs. A jump in U.S. bond yields weighed on risk appetite and provided a boost for the world’s main reserve currency.

There are no policy-relevant economic data releases this week or any scheduled speeches from Fed officials. The market will be spared ahead of their Jan 25-26 policy meeting.

GOLD

Gold prices eased, pressured by higher U.S. Treasury yields, as investors looked for clues about the Federal Reserve's interest rate hike timeline from its policy meeting next week.

Spot gold fell 0.1% to $1,812.00 per ounce. U.S. gold futures were little changed at $1,811.10.

Spot silver was down 0.25% at $23.43 an ounce, while platinum and palladium dropped 0.90% to $970.40, and $1,887.50, respectively.

ECONOMIC OUTLOOK

Asia's share markets struggled on Wednesday as U.S. Treasury yields hit fresh two-year highs and a global technology stock sell-off unsettled investors worrying about inflation and bracing for tighter U.S. monetary policy.

The jump in Treasury yields slammed U.S. and European technology stocks overnight, which spilled to Asian trading markets Wednesday.

Investors braced for a more hawkish Federal Reserve, which is meeting on Jan 25 and 26 with bets growing that the central bank would start tightening to tackle fast-rising inflation, with the first seen coming in March, and one from the European Central Bank.

Shares in Sony Group slumped more than 10% on Wednesday, their lowest level since late October, after gaming rival Microsoft said it will buy developer Activision Blizzard in a record $68.7 billion deal for the industry.

Elsewhere, shares of embattled cruise operator Genting Hong Kong was suspended until further notice. In a regulatory filing, Genting said it was filing to wind up the company and apply for the appointment of provisional liquidators as it was unable to secure funds needed to stay afloat. Earlier this month, the company warned it may not be able to pay its debts and other obligations after its German shipbuilding subsidiary MV Werften filed for insolvency.