• Asia-Pacific equities grind lower amid fears of higher rates, slower economic recovery.
• RBI keeps rates unchanged but multiple China state banks cut rates.
• Aussie trade surplus narrows while Japan’s Annualized GDP growth improves.
• Mixed mood prevails but higher yields, downbeat S&P500 Futures weigh on Asian shares.

Market sentiment in the Asia-Pacific region remains sluggish, mostly downbeat, amid fears of slower economic recovery due to hawkish central bank actions. Adding strength to the downbeat risk profile could be mixed headlines from China, Australia and Japan, as well as due to the upbeat US Treasury bond yields.

While portraying the mood, S&P500 Futures extend Wednesday’s losses to 4,265, down 0.25% intraday, whereas the US 10-year Treasury bond yields grind near 3.79% after rising the most in five weeks the previous day. That said, MSCI’s Index of Asia-Pacific shares ex-Japan drops 0.60% while Japan’s Nikkei 225 prints 1.4% intraday losses heading into Thursday’s Asian session.

It should be noted that the Reserve Bank of India (RBI) keeps the benchmark Repo rate unchanged at 6.5% by matching market forecasts after June’s monetary policy meeting. However, a slew of Chinese state banks including the Industrial and Commercial Bank of China, Bank of China and Construction Bank cut their benchmark rates. The same raises speculations that the Chinese central bank, namely the People’s Bank of China (PBOC), will also cut the rates. With this, India’s BSE Sensex print mild gains but most Chinese stocks are in the red by the press time.

Elsewhere, hawkish concerns about the Reserve Bank of Australia (RBA) and the Reserve Bank of New Zealand (RBNZ) join the downbeat sentiment in China to weigh on the stocks in Australia and China.

On a broader front, the risk profile soured on the latest Organisation for Economic Co-operation and Development (OECD) report that said that the global economy is set for a weak recovery over the coming years as persistent core inflation and tighter monetary policy weigh on demand. Also contributing to the risk-off mood were concerns that the Fed isn’t likely to announce any rate hike in June but is expected to unveil a 0.25% rate lift in July.

Amid these plays, the US Dollar Index (DXY) remains pressured while WTI crude oil prints mild losses and the Gold price remains mildly bid. Further, Antipodeans struggle for clear directions despite positing mild intraday gains of late.