Stella Qiu and Kanupriya Kapoor

SINGAPORE (Reuters – Asian stock markets and U.S. Futures plunged on Friday due to concerns about tightening by the Federal Reserve and weaker earnings data.

MSCI’s Asia-Pacific broadest index, which excludes Japan, was 0.8% lower and fell 1.66%. Oil prices plunged sharply this week, and they are now on track to record their first weekly decline of the year.

Rob Carnell from ING Singapore, Chief Economist said that the selloff in U.S. stocks yesterday was devastating and would dominate Asia today.

“But, there are pockets of optimism such as China’s more accommodating moves regarding monetary policy,” said he.

Investors are anxiously awaiting the Fed’s next policy meeting to learn more about how they intend to combat inflation.

Nasdaq futures fell 1% in Asian trade, impacted by Netflix Inc (NASDAQ)’s forecast of weak subscriber growth for the first quarter.

These moves were extended to Chinese shares, with the Hong Kong benchmark dropping 0.24% following its highest day in six month’s time the day prior and the Chinese blue chip losing 0.5% after registering gains the previous day.

China reduced benchmark mortgage rates for China on Thursday. The latest step in a round monetary easing that aims to support an economy weakened by worries about Omicron and its property sector.

According to David Chao (global market strategist Asia Pacific (ex Japan) at Invesco, “The major divergence between equity market performance in the U.S.A and Greater China can also be attributed a bifurcation of monetary policies.”

China’s move was “a very positive sign”, however, the Fed’s actions could increase near-term volatility of markets, he stated.

Oil fell as OPEC+ was unable to meet its planned increases in production and fears of Russia invading Ukraine caused jitters on global markets.

Carnell from ING said that getting product on the market was a key factor in right now as demand is strong and slowing reopening of the globe.

The price of a barrel fell to $83.46 on Friday morning, and then dropped to $86.14 by 2.55%. [O/R]

U.S. Treasury yields were slightly lower on the curve after having increased sharply earlier in week. Investors positioned themselves to take advantage of the probability that the Federal Reserve will increase its monetary policy and prevent inflation. [US/]

Last week’s benchmark 10-year note yields fell to 1.7791%. This is their lowest level in a week after they reached an all-time high of 1.902% two years ago.

Although the dollar gained in earlier weeks due to higher yields, it was flat on Friday against six currencies.

The greenback did, however, lose ground on the safe haven yen, falling to a one-week low of 113.8 per dollar, while the risk friendly Australian dollar AUD=D3> shed 0.39%.

The price per ounce remains at $1,838.41