(Reuters) – S&P Global Ratings, a unit of financial information provider S&P Global Inc (SPGI.N), said on Monday it will withdraw ratings for all Russian entities before April 15.

The decision comes weeks after parent company S&P Global said it was suspending commercial operations in Russia, joining a global exodus of companies out of the country due to tightening economic sanctions over Moscow’s invasion of Ukraine.

The credit rating agency is doubling down on its corporate boycott of Russia after the European Union announced a ban on providing credit ratings to legal persons, entities or bodies established in Russia, S&P Global Ratings said.

Western sanctions have frozen much of Russia’s central bank’s $640 billion in assets, barred several banks from global payments system SWIFT and sent the rouble into free fall. Credit rating agencies Moody’s and Fitch also suspended commercial operations in Russia earlier this month.

Reporting by Niket Nishant in Bengaluru; Editing by Shounak Dasgupta

NEW YORK, March 6 (Reuters) – Oil prices soared to their highest since 2008 due to delays in the potential return of Iranian crude to global markets and as the United States and European allies consider banning imports of Russian oil.

Talks to revive Iran’s 2015 nuclear deal with world powers were mired in uncertainty on Sunday following Russia’s demands for a U.S. guarantee that the sanctions it faces over the Ukraine conflict will not hurt its trade with Tehran. China has also raised new demands, according to sources.

In response to Russia’s demands, U.S. Secretary of State Antony Blinken said on Sunday that the sanctions imposed on Russia over its Ukraine invasion have nothing to do with a potential nuclear deal with Iran. The United States and European allies, meanwhile, are exploring banning imports of Russian oil, Blinken said on Sunday, and the White House coordinated with key Congressional committees moving forward with their own ban.

Brent rose $11.67, or 9.9%, to $129.78 a barrel by 6:50 p.m. EST (2350 GMT), while U.S. West Texas Intermediate (WTI) crude rose $10.83, or 9.4%, to $126.51, putting both contracts on track for their highest daily percentage gains since May 2020.

In the first few minutes of trade on Sunday, both benchmarks rose to their highest since July 2008 with Brent at $139.13 a barrel and WTI at $130.50. Both contracts hit their highest in July 2008 with Brent at $147.50 a barrel and WTI at $147.27. U.S. gasoline and distillate futures followed the surge in crude prices in the first few minutes after the market opened on Sunday, rising to record highs.

“Iran was the only real bearish factor hanging over the market but if now the Iranian deal gets delayed, we could get to tank bottoms a lot quicker especially if Russian barrels remain off the market for long,” said Amrita Sen, co-founder of Energy Aspects, a think tank. Analysts from JP Morgan said this week oil could soar to $185 per barrel this year.

“The idea was not to sanction oil and gas because of their essential nature, but oil is getting sanctioned by private actors not wanting to pick it up or ports not wanting to receive it and the longer this goes on the more supply chains are going to buckle,” said Daniel Yergin, author and vice chairman of S&P Global ahead of the CERAWeek conference in Houston.

Russia exports around 7 million bpd of oil and refined products or 7% of global supply. Some volumes of Kazakhstan’s oil exports from Russian ports have also faced complications. Analysts at Bank of America said if most of Russia’s oil exports are cut off, there could be a 5 million barrel or larger shortfall, and that means oil prices could double from $100 to $200 a barrel.

Iran will take several months to restore oil flows even if it reaches a nuclear deal, analysts said. Eurasia Group said fresh Russian demands could disrupt nuclear talks although it still kept the odds of a deal at 70%.

“Russia may intend to use Iran as a route to bypass Western sanctions. A written guarantee allowing Russia to do so is probably well beyond the realm of what Washington can offer in the midst of a full-scale war in Ukraine,” said Eurasia’s Henry Rome.

Also supporting crude prices, the closure of Libya’s El Feel and Sharara oilfields resulted in the loss of 330,000 barrels per day (bpd), the National Oil Corporation (NOC) said on Sunday. Libya, an OPEC member, produced about 1.2 million bpd of crude in 2021, according to U.S. energy data.

In the United States, meanwhile, the average price of a gallon of gasoline hit $4.009 on Sunday, according to AAA, an automobile association, which is the highest since late July 2008. Consumers are paying 40 cents more than a week ago, and 57 cents more than a month ago.

AAA, which has data going back to 2000, said U.S. gasoline prices at the pump rose to a record $4.114 on July 17, 2008. Senior U.S. officials traveled to Venezuela on Saturday for talks with President Nicolas Maduro’s government, seeking to determine whether Caracas is prepared to distance itself from close ally Russia.

Additional reporting by Dmitry Zhdannikov in London; Editing by Raissa Kasolowsky, Lisa Shumaker, Daniel Wallis, Sam Holmes and Diane Craft

NEW YORK/LONDON, Feb 28 (Reuters) – The Russian ruble hit record lows on Monday while world stocks slid and oil prices jumped after the West ramped up sanctions against Moscow over its invasion of Ukraine, including blocking Russian banks from the SWIFT global payments system.

Russia’s central bank hiked its key interest rate to 20% from 9.5% and introduced some capital controls to bolster the ruble and fight inflation. Authorities ordered exporting companies to sell 80% of their foreign revenues as the ruble slid as much as 32% before recouping some losses.

The European arm of Sberbank (SBER.MM), Russia’s biggest lender, faces failure, the European Central Bank (ECB) said, an early sign of a looming economic crisis in Russia. The fallout from tougher sanctions also rippled across financial markets outside Russia, especially in Europe where the main German and French bourses fell more than 3% in early trade but later pared most of those losses.

European banks were hit hard, with those most exposed to Russia, including Austria’s Raiffeisen Bank (RBIV.VI), UniCredit (CRDI.MI) and Societe Generale (SOGN.PA), falling between 9.5% and 14%. The wider euro zone index (.SX7E) of 22 major banks lost 5.7%, but the pan-regional STOXX 600 stock index closed down a scant 0.09% as sentiment improved at its close.

European bank stocks slide as West ramps up Russia sanctions
European bank stocks slide as West ramps up Russia sanctions
However, talks on a ceasefire ended without a breakthrough and a member of the Ukrainian delegation said the discussions were difficult as the Russian side was biased, news that darkened the mood on Wall Street.

The Dow Jones Industrial Average (.DJI) closed down 0.49% and the S&P 500 (.SPX) lost 0.25%. The Nasdaq Composite (.IXIC) rebounded, adding 0.41%, as investors bet the Federal Reserve will be less aggressive hiking interest rates. MSCI’s all-country world equity index (.MIWD00000PUS) closed down 0.077%.

Markets are likely to remain choppy in the near term, analysts said. While valuations have fallen and some risks have been priced into the market, it’s not time to derisk, Solita Marcelli, chief investment office for the Americas at UBS Global Weather Management, told clients in a note.

“Investors trying to trade off geopolitical events can easily get whipsawed,” Marcelli said, noting that sell-offs based on geopolitical events have been brief in the past. Oil prices surged after Russian President Vladimir Putin on Sunday put nuclear-armed forces on high alert.

The ramp-up in tensions heightened fears that oil supplies from the world’s second-largest producer could be disrupted, sending Brent crude futures to settle up $3.06 at $100.99 a barrel. U.S. oil settled up 4.5% at $95.72 a barrel, after topping $100 last week, their highest since 2014.

Even if Western governments allow the purchase of oil and gas from Russia, markets need to digest the disruption to hedging contracts, insurance coverage and energy markets, said Christopher Smart, chief global strategist at Barings Investment Institute.

“If Russian entities are effectively blocked from exchanging their money into the world’s reserves currencies, will the Russian government allow the foreign debts to be paid?” he said.

Reporting by Herbert Lash, additional reporting by Dhara Ranasinghe and Elizabeth Howcroft in London, Kevin Buckland in Tokyo; Editing by Jason Neely, Hugh Lawson, Nick Zieminski and Jonathan Oatis

NEW YORK, Feb 22 (Reuters) – Crude oil futures on Tuesday reached their highest levels since 2014 on supply concerns and stocks sold off in a volatile session as investors eyed international responses after Russia sent troops into parts of Ukraine.

Markets were jittery a day after Russia’s move but the safe-haven U.S. dollar was slightly lower against major currencies while gold, another safety bet, was also in the red.

U.S. President Joe Biden announced the first sanctions against Russia for what he called Moscow’s beginning of an invasion of Ukraine, and he promised steeper punishments ahead if Russia continued its aggression. While the S&P 500 confirmed it is in a correction by closing more than 10% under its record high, it still finished above its session low, reached before Biden spoke.

“When Biden came out and set sanctions they weren’t maybe as severe as people were fearing,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. And while investors were jittery, Pavlik said that “people are trying to sit with what they own if they’ve adjusted their portfolio ahead of all this. For those that haven’t, it’s a little late in the game.”

The European Union also agreed on new sanctions against Russia on Tuesday while German Chancellor Olaf Scholz halted the new Nord Stream 2 gas pipeline from Russia and Britain took action against Russian banks. read more

“The world is still hoping this is somewhat limited and doesn’t really spread across Europe and Ukraine,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia, noting that riskier assets were selling off. “Nobody’s rushing to buy.”

Brent crude futures settled up 1.5% at $96.84 per barrel after earlier topping $99 for the highest level since September 2014, reflecting fears that Russia’s energy exports could be disrupted by any conflict. U.S. West Texas Intermediate (WTI) crude settled up 1.4% at $92.35 per barrel after earlier hitting $96, its highest level since August 2014.

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, February 16, 2022. REUTERS/Staff
The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, February 16, 2022. REUTERS/Staff
The Dow Jones Industrial Average (.DJI) closed down 482.57 points, or 1.42%, at 33,596.61, while the S&P 500 (.SPX) lost 44.11 points, or 1.01%, falling to 4,304.76 and the Nasdaq Composite (.IXIC) dropped 166.55 points, or 1.23%, to 13,381.52.

The MSCI world equity index (.MIWD00000PUS), which tracks shares in 50 countries, shed 0.9% after earlier falling 1.5%, with the index at levels not seen since Jan. 28. Spot gold fell 0.4% at $1,898.77 after earlier climbing to its highest level since June. read more

Yields on U.S. Treasuries edged higher after Biden announced new sanctions on Russia in retaliation for Moscow’s dispatch of troops into what it recognized as two breakaway regions of Ukraine, but the bond market reaction was muted overall. Benchmark 10-year notes last fell 2/32 in price to yield 1.9372%, up from 1.93% in the previous session. Yields move in the opposite direction to bond prices.

The dollar index fell 0.047%, with the euro up 0.14% to $1.1326. The Japanese yen weakened 0.29% versus the greenback at 115.06 per dollar, while Sterling was last trading at $1.3581, down 0.13% on the day. The Russian rouble slid to 80.9275 against the U.S. dollar in earlier trading, touching its lowest level against the greenback since November 2020, before reversing course. The dollar was last down 1.7% against the rouble.

Russian dollar bonds extended their losses a little after the U.S. sanctions were announced, with longer-dated issues slipping to record lows trading in the mid-90s, data showed. The premium demanded by investors to hold Russian debt over safe-have U.S. Treasuries blew out to 329 basis points, the widest since the COVID-19 pandemic market rout in spring 2020. (.JPMEGDRUSR)

Reporting by Sinéad Carew in New York, Devik Jain in Bengaluru, additional reporting by Karin Strohecker, Tom Wilson, Marc Jones in London, Alun John and Xie Yu in Hong Kong, Tom Westbrook in Singapore, Andrew Galbraith in Shanghai Editing by David Goodman, Will Dunham, Mark Potter and Mark Heinrich

HONG KONG, Feb 15 (Reuters) – Tensions in eastern Europe weighed on the euro on Tuesday and pushed demand for the dollar and the safe-haven yen, while the greenback was also helped by debate about more aggressive U.S. interest rate hikes.

The euro was at $1.1308 in early Asia having touched $1.1278 the day before, its lowest in a week-and-a-half. The yen was at 115.33 per dollar, after briefly hitting 114.99 on Monday, its strongest in a week. Moves were slightly more cautious elsewhere and the overall result was that the dollar index, which tracks the greenback against six peers was at 96.244, just off Monday’s two-week high.

Investors were spooked somewhat overnight by Ukrainian President Volodymyr Zelenskiy calling on citizens to fly the country’s flags from buildings and sing the national anthem in unison on Feb. 16, a date that some Western media have cited as a possible start of a Russian invasion.

Ukrainian officials stressed, however, that Zelenskiy was not predicting an attack on that date, but responding with scepticism to foreign media reports. Away from geopolitics, U.S. Federal Reserve officials continuing to spar over how aggressively to begin upcoming interest rate increases at their March meeting.

Hawkish Fed official James Bullard, who last week broke ranks to call for a large 50 basis point increase, reiterated calls for a faster pace of interest rate hikes on Monday, though other officials were more cautious in their public remarks.

Tensions in Ukraine and the more aggressive outlooks for the Fed funds rate are both supportive for the dollar in the near term, said Kim Mundy, senior currency strategist at Commonwealth Bank of Australia.

“Your best bet for seeing which is having a greater impact is to look at USD/JPY and we have seen that trading a little bit weaker in the last day or two, which suggests markets are very conscious of what’s happening on the Ukraine border,” Mundy said. “We just have to keep watching the headlines and see what happens.”

The safe-haven yen typically benefits when investors are nervous, while the contrast between U.S. interest rate hikes and a dovish Bank of Japan ought to push the yen lower.

The BOJ, last week, said it would buy an unlimited amount of 10-year government bonds at 0.25%, underscoring its resolve to prevent rising global yields from pushing up domestic borrowing costs too much.
Investors did not test this 0.25% line on Monday. Russia’s rouble remained volatile but strengthened overall on Monday, and gained 1.1%, though it was slightly weaker again in early Asia.

Reporting by Alun John; Editing by Sam Holmes

SINGAPORE, Feb 8 (Reuters) – Asian equities consolidated recent gains as investors’ sentiment improved amid strong results by U.S. companies, helping stocks recover from the worst start to the year since 2016, while a resurgent euro paused ahead of U.S inflation data.

Markets are still alert for rate increases in both the euro zone and the United States after the European Central Bank last week was considered to have adopted a more hawkish tone. Euro zone yields rose sharply on Monday with Italian bond prices underperforming their peers. The United States has reported stronger-than-expected jobs and earnings data. read more

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) edged up 0.05% to 614.6 after rising to 617.7, the highest since January 25. The benchmark is now up about 3% from a more than one-year low of 595.99 struck on Jan 27.

“Much of investors’ concern is focused on the five Fed increases that markets are pricing in for 2022, and if they won’t be sufficient to contain inflation,” Seema Shah, chief strategist at Principal Global Investors, said in a note. “Yet, the Fed’s urgency to tighten should soon ease as the most acute economic price pressures start fading. Furthermore, while U.S. growth has likely peaked, a recession isn’t in the cards,” she said.

Japan’s Nikkei (.N225) rose 0.4%, Korean stocks (.KSII) went up 0.7% and Taiwan (.TWII) gained 0.6%. Hong Kong stocks figured among the losers, with the Hang Seng index (.HSI) falling 0.7%.

S&P 500 futures were steady and Nasdaq futures edged up 0.06%. The MSCI World index (.MIWD00000PUS) fell 6.2% in January – the worst start to the year since 2016. U.S. consumer price figures for January are due on Thursday and could show core inflation accelerating to the fastest pace since 1982 at 5.9%.

Major Wall Street stock indexes were mixed throughout the session on Monday before ending down as markets digested mixed quarterly results from megacaps Amazon.com Inc and Facebook owner Meta Platforms (FB.O).

The Dow Jones Industrial Average (.DJI) ended flat, while the S&P 500 (.SPX) lost 0.37% and the Nasdaq Composite (.IXIC) dropped 0.6%. Of the 278 companies in the S&P 500 that have posted earnings as of Friday, 78.4% reported above analysts’ expectations, according to Refinitiv data.

“Corporate profits are the strongest in decades, consumers are backed by excess savings, and gradual supply chain normalization should provide a boost to inventories and production,” Shah of Principal Global Investors said.

The U.S. January payrolls report on Friday showed annual growth in average hourly earnings climbed to 5.7%, from 4.9%, while payrolls for prior months were revised up by 709,000 to radically change the trend in hiring. In foreign exchange markets, the euro inched down 0.1% , having shot up 2.7% last week in its best performance since early 2020 on the tightening expectations. read more

The euro has held gains but has been unable to beat resistance around $1.1483 even as European bond yields have leapt and last bought $1.1441. The dollar crept 0.1% higher on the yen to 115.27 and the U.S. dollar index stayed at 95.457. Treasury yields hovered close to pandemic highs, with the benchmark 10-year yield up 1.6 basis points to 1.9358%.

Oil prices eased on Tuesday ahead of talks between the United States and Iran officials, which could lead to the removal of U.S. sanctions on Iranian oil sales. Brent crude was last down 0.4% to $92.29 a barrel after hitting a seven-year high of $94 on Monday. Spot gold prices were steady at a 1-week high at $1,822 per ounce.

Reporting by Anshuman Daga; Additional reporting by Tom Westbrook. Editing by Gerry Doyle

SYDNEY, Feb 7 (Reuters) – Asian share markets eased on Monday after stunningly strong U.S. jobs data soothed concerns about the global economy but also added to the risk of an aggressive tightening by the Federal Reserve.

Geopolitics also remained a worry as the White House warned Russia could invade Ukraine any day and French President Emmanuel Macron prepared for a trip to Moscow. The cautious mood saw MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) dip 0.1% in early trade. Japan’s Nikkei (.N225) fell 0.4% and South Korea (.KS11) 0.6%.

Both S&P 500 futures and Nasdaq futures were little changed, after last week’s market turmoil saw Amazon.com Inc gain almost $200 billion while Facebook-owner Meta Platforms Inc (FB.O) lost just as much. BofA analyst Savita Subramanian noted company guidance for 2022 had weakened significantly with most stocks falling following earnings reports.

“Commentaries suggested worsening labour shortages and supply chain issues, with a bigger headwind expected in Q1 than in Q4,” Subramanian said in a note. With wages being the biggest cost component for companies, margin pressure was set to continue.

The January payrolls report showed annual growth in average hourly earnings climbed to 5.7%, from 4.9%, while payrolls for prior months were revised up by 709,000 to radically change the trend in hiring.

“The report not only indicated that payrolls were way more than anyone could have imagined, but there was exceptional strength in earnings which has to add growing concern among Fed officials about upward pressure on inflation,” said Kevin Cummins, chief U.S. economist at NatWest Markets.

Consumer price figures for January are due on Thursday and could well show core inflation accelerating to the fastest pace since 1982 at 5.9%. As a result, markets moved to price in a one-in-three chance the Fed might hike by a full 50 basis points in March and the real prospect of rates reaching 1.5% by year end. That sent two-year yields up 15 basis points for the week, the biggest rise since late 2019, and they were last standing at 1.31%.

In currency markets, the euro continued to bask in the glow of a newly hawkish European Central Bank as markets brought forward the likely timing of a first rate rise and sent bond yields sharply higher. Klaas Knot, the Dutch Central Bank President and a member of the ECB’s governing council, said on Sunday he expects a hike in the fourth quarter of this year.

The single currency was taking in the view at $1.1456 , having shot up 2.7% last week in its best performance since early 2020. Technically, a break of resistance around $1.1482 would open the way to $1.1600 and higher. The dollar fared better on the Japanese yen as the market still sees little chance the Bank of Japan will tighten this year. It was steady at 115.27 yen , while the euro was up at 132.06 yen having climbed 2.7% last week.

The wild swing in the euro left the U.S. dollar index down at 95.436 , after shedding 1.8% last week. Gold was a shade firmer at $1,808 an ounce , but has been struggling in the face of higher bond yields.

Oil prices were up near seven-year highs amid concerns about supply given by frigid U.S. weather and ongoing political turmoil among major world producers. Brent added another 32 cents to $92.97 a barrel, while U.S. crude rose 42 cents to $91.89.

By Wayne Cole, Editing by Sam Holmes

TOKYO, Jan 31 (Reuters) – Japan’s factory output shrank for the first time in three months in December as a decline in machinery outweighed a small rise in car production, casting a cloud over the strength of the economic recovery.

Retail sales posted their third straight month of year-on-year gains in December as low coronavirus cases encouraged shoppers. Record infections this month driven by the Omicron variant, however, are expected to have hit consumer sentiment.

Factory production lost 1.0% in December from the previous month, pulled down by a decline in output of general-purpose and production machinery, including chip-making equipment and engines used in manufacturing. That meant that output, which fell faster than the 0.8% decline forecast in a Reuters poll of economists, dropped for the first time in three months.

“Output especially fell among capital goods makers, probably due to the strong impact from the chip shortages,” said Takeshi Minami, chief economist at Norinchukin Research Institute. “It suggests its impact is widening even though the focus has been on the car industry.”

Automakers have been forced to curb production even as demand in key markets such as China rebounds, while they also have had to contend with soaring semiconductor demand at consumer electronic companies.

Toyota Motor Co (7203.T), the world’s biggest car seller, said this month it expected production to fall short of an annual target of 9 million vehicles for its current business year that runs until the end of March due to the drag from the chip shortage. read more

Last week, motor maker Nidec Corp’s (6594.T) third-quarter operating profit dipped as rising material prices and a shortage of semiconductors squeezed margins. The data showed output growth of cars and other vehicles slowed to 1.5% from the previous month in December, much weaker than the 43.7% surge in November and a 15.9% jump in October.

Some companies in the car industry had weathered the competition for chip supply better than others, a government official said. “Procurement is increasing, but the situation is different from firm to firm,” the official said.

Manufacturers surveyed by the Ministry of Economy, Trade and Industry (METI) expected output to grow 5.2% in January and 2.2% in February. The forecasts likely didn’t include production cuts made after the Jan. 10 survey deadline, the official said.

Separate data showed retail sales were weaker than expected, rising 1.4% in December from a year earlier, which was smaller than the median market forecast for a 2.7% rise. That marked the third straight month of increases for retail sales, which were lifted by stronger demand for general merchandise and food and beverages.

Reporting by Daniel Leussink; Additional reporting by Yoshifumi Takemoto, Kantaro Komiya and David Dolan; Editing by Sam Holmes

BEIJING, Jan 27 (Reuters) – Oil prices fell on Thursday as investors cashed in profits from the 2% gains in the previous session after the U.S. Federal Reserve indicated an interest rate hike in March, leading to a technical correction in surging energy markets.

Futures pulled back amid a broader decline in financial markets triggered by the March interest rate increase telegraphed by the Fed and a surge in the U.S. dollar. Crude prices have surged amid the tensions between Ukraine and Russia, the world’s second-largest oil producer, that has fanned fears of disruptions of natural gas to Europe. Brent crude futures slipped 31 cents, or 0.3%, to $89.65 a barrel at 0122 GMT, after jumping about 2% to hit $90 for the first time in seven years on Wednesday.

U.S. West Texas Intermediate (WTI) crude futures also eased 26 cents, or 0.3%, to $87.09 a barrel, after gaining 2% in the previous session. “Continued supply challenges and mounting Russia-Ukraine tensions continue to support crude oil prices. It is down slightly today but I think it is nothing more than a technical move,” said Howie Lee, economist at OCBC in Singapore.

While the Russia-Ukraine tensions have a role in lifting oil prices, “real supply challenges both within OPEC and the U.S. … have been the main drivers in pushing the market higher,” Lee said, referring to the Organization of the Petroleum Exporting Countries (OPEC). OPEC missed its planned supply increase target in December, highlighting capacity constraints that are limiting supply as global demand recovers from the COVID-19 pandemic. read more

OPEC+, which includes OPEC and other allies such as Russia, is gradually relaxing 2020’s output cuts as demand recovers from the demand collapse that year. But many smaller producers can’t raise supply and others have been wary of pumping too much in case of renewed COVID-19 setbacks.

An increase in crude oil and gasoline inventories in the United States, the world’s biggest oil consumer, alleviated some of the concerns about supply.

Crude inventories rose by 2.4 million barrels in the week to Jan. 21 to 416.2 million barrels, compared with analysts’ expectations in a Reuters poll for a 728,000-barrel drop, the Energy Information Administration (EIA) said on Wednesday. Gasoline stocks =ECI rose by 1.3 million barrels last week to 247.9 million barrels, the EIA said, the most since February 2021.

Reporting by Emily Chow; Editing by Christian Schmollinger

SINGAPORE, Jan 21 (Reuters) – Asian share markets and U.S. futures fell on Friday, after U.S. stocks took a knock overnight, hurt by lingering concerns over the Federal Reserve’s tightening and weaker-than-expected economic and earnings data.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was down 0.8%, and Japan’s Nikkei (.N225) slid 1.66%. Oil prices fell sharply and were on track for their first weekly loss this year. “The selloff of U.S. stocks yesterday was brutal and will dominate Asia this morning,” said Rob Carnell, chief economist at ING in Singapore.

“But there are pockets of optimism like China’s more accommodating moves on monetary policy,” he added. The Nasdaq (.IXIC) dropped late in the U.S. session, to close 1.3% lower, as investors anxiously await the Fed’s policy meeting next week for details on how it intends to tackle inflation. Nasdaq futures were down 1% in Asian trading, hurt by Netflix Inc forecasting weak first-quarter subscriber growth after the close.

The moves extended to Chinese shares with the Hong Kong benchmark (.HSI) losing 0.24% after posting its best day in six months the day before and Chinese blue chips (.CSI300) losing 0.5% also after gains the day before.

China cut its benchmark mortgage rates on Thursday, the latest move in a round of monetary easing aimed at propping up an economy soured by the country’s troubled property sector and worries over the Omicron variant of coronavirus. read more

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

China’s moves were “a very encouraging sign” but the Fed’s actions could add near-term market volatility, he said. Oil dropped as OPEC+ struggled to meet its scheduled increases in production targets and the spectre of Russia invading Ukraine sent jitters through global markets.

“Getting product out to market is a major factor weighing right now, because demand remains firm as the world slowly reopens,” ING’s Carnell, said. U.S. crude fell 2.44% to $83.46 per barrel on Friday morning and Brent crude lost 2.55% to $86.14.

U.S. Treasury yields were slightly lower along the curve on Friday, having risen sharply earlier in the week as investors positioned themselves for the likelihood that the Federal Reserve will tighten monetary policy more aggressively to stave off inflation.

Yields on benchmark 10-year notes were last at 1.7791%, their lowest in a week, having hit a two-year high of 1.902% on Wednesday. Rising yields had helped the dollar to gain earlier in the week, although on Friday the dollar index remained largely flat against a basket of six major 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%. Spot gold remain mostly unchanged at $1,838.41 an ounce.

Reporting by Kanupriya Kapoor and Stella Qiu; additional reporting by Alun John; editing by Richard Pullin