The song remains the same

A look at the day ahead in Asian markets from Jamie McGeever

Another day, another stock market sell-off and round of Asian currency weakness kicked off what is shaping up to be another volatile week.

Russia’s bombing of Kyiv and other Ukrainian cities on Monday darkened what was already a pretty bleak mood across world markets, and investors will be hoping something somewhere eases the selling pressure on Tuesday.

Unfortunately, nothing obvious jumps out.

Fed Vice Chair Lael Brainard said on Monday that further policy tightening will be dependent on data and risks, giving some investors hope that the Fed might take its foot off the pedal soon.

But she also stressed that policy will need to stay restrictive for some time.

World stocks ended in the red, and the dollar rose again. Asian assets suffered more – the MSCI Asia ex-Japan equity index fell 2%, and several currencies in the region weakened sharply.

The yen is right back in 24-year low and BOJ intervention territory, around 146 per dollar, and China’s market reopening after Golden Week was rocky, to put it mildly.

Shares in tech giants Alibaba and Tencent as well as in chipmakers slumped following the sweeping set of new U.S. export control measures on Friday aimed at slowing China’s technological and military advances.

The Biden administration’s proposals include measures to cut off China from certain semiconductors made anywhere in the world with U.S. equipment.

With Beijing already battling to support the property sector, currency, and economy at large, this is an extra headache it could do without.

Key developments that could provide more direction to markets on Tuesday:

Australia consumer sentiment (October)

Australia business confidence (September)

Japan current account (August)

IMF/World Bank meetings in Washington

Fed’s Harker and Mester speak