EQUITIES

Asia-Pacific shares were mixed on Wednesday, as soft U.S. data tempered rate-hike worries.

Mainland China markets slipped. The Shanghai Composite was 0.38% lower. Hong Kong’s Hang Seng index dropped 0.33%. Japan’s Nikkei 225 gave up early gains to fall 0.50%.

Elsewhere, the S&P/ASX 200 in Australia added 0.47% while in South Korea, the KOSPI was up 0.17%.

Wall Street steadied overnight after two days of heavy losses. The Dow Jones Industrial Average fell 0.47% to 32,909.59, the S&P 500 slid 0.22% to 4,128.73, and the Nasdaq Composite closed flat at 12,381.30.

OIL

Oil prices fell on Wednesday, taking a breather from a nearly 4% surge the previous day on receding fears of an imminent output cut by the OPEC+.

The potential OPEC+ production cuts may not be imminent and are likely to coincide with the return of Iran to oil markets should that country clinch a nuclear deal with the West, nine OPEC sources told Reuters on Tuesday. A senior U.S. official told Reuters on Monday that Iran had dropped some of its main demands on resurrecting a deal.

Brent benchmark crude futures fell 0.31%, to $99.84 a barrel, after rising 3.88% on Tuesday. The U.S. WTI crude futures contract was down 0.39%, at $93.40 a barrel, having jumped 3.74% the previous day.

Underlining tight supply, U.S. crude stockpiles fell by about 5.6 million barrels for the week ended Aug. 19., according to market sources citing American Petroleum Institute figures on Tuesday, against analysts' estimate of a drop by 900,000 barrels. Gasoline inventories meanwhile rose by about 268,000 barrels, and distillate stocks increased by about 1.1 million barrels.

CURRENCIES

The U.S. dollar index rose 0.15% to 108.681 on Wednesday, steadied just below recent peaks as investors waited to hear from the Fed and pondered whether weak U.S. data may slow the pace of rate hikes. The yield on 10-year Treasury notes was at 3.050%.

GOLD

Gold prices were subdued as investors cautious ahead of Jackson Hole symposium due later this week.

Spot gold was down 0.13% at $1,746.00 per ounce, while the U.S. gold futures eased 0.14% to $1,758.70.

Spot silver fell 0.6% to $19.04 per ounce, platinum dipped 0.3% to $876.56, while palladium gained 0.2% to $1,984.67.

ECONOMIC OUTLOOK

Asian stock markets slipped for an eighth straight session on Wednesday, as renewed fears around an aggressive monetary policy tightening path by the Fed lingers. Fresh hawkish comments from a Federal Reserve official kept investors cautious ahead of this week's Jackson Hole symposium.

Fed Chair Jerome Powell's speech at the annual global central banking conference in Jackson Hole, Wyoming on Friday will be keenly watched for more cues on future interest rate hikes. The U.S. central bank has raised its benchmark overnight interest rate by 225-bps in total since March to contain inflationary pressures and has noted that further tightening would depend on economic data points.

Traders are split between expecting a 50-bps hike and a 75-bps hike by the central bank after several policymakers recently pushed back against expectations of a dovish pivot and emphasized the Fed's commitment to fight against inflation.

Sales of new U.S. single-family homes plunged to a 6-1/2-year low in July, while a survey from S&P Global showed its measure of private sector business activity fell to a 27-month low, suggesting Fed efforts to tame inflation were working.

Economic activity weakened from the U.S. to Europe and Asia, reinforcing concerns that soaring prices and the war in Ukraine will tip the world into a recession. Activity in Asia slumped, and output in the 19-nation eurozone also fell as record energy and food inflation saps demand and more sectors succumb to the darkening outlook.

While the S&P flash composite PMI of business activity in Europe was not as bad as feared, analysts said grimmer news for the economy is likely given how gas prices have surged to record highs ahead of winter. Benchmark gas prices in the EU surged 13% overnight to a record peak, having doubled in just a month to be 14 times higher than the average of the past decade.

Germany was a particular weak spot, posting the sharpest decline in output since June 2020 as it rushes to reduce dependence on Russian natural gas. In France, meanwhile, activity contracted for the first time in a year and a half.

The UK’s PMI managed to remain above the 50 level that separates expansion from contraction but recorded an unexpectedly large plunge in factory activity.