$TEN

By Stella Qiu SYDNEY (Reuters) - Asian shares fell on Monday, dragged by China, after central banks last week reinforced the message that interest rates would stay higher for longer, while investors braced for inflation data from the U.S. and Europe. The yen was jittery near the closely watched 150 per dollar level amid intervention fears, after the Bank of Japan made no change to its dovish monetary policy. Governor Kazuo Ueda is giving a speech and taking questions from 0130 GMT. [FRX/] Europe is set for a subdued open, with EUROSTOXX 50 futures off 0.3%. S&P 500 futures, however, rose 0.3% while Nasdaq futures gained 0.4%, after Hollywood's writers union reached a preliminary labor agreement with major studios. In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.5%, edging back to a 10-month low plumbed just last week. Japan's Nikkei, on the other hand, rose 0.9%, as investors bought beaten-down shares. (T) Chinese shares fell after a rebound on Friday, as property concerns and pre-holiday caution weighed. The blue chips index eased 0.5% and Hong Kong's Hang Seng index slumped 1.2% as Chinese property developers dived more than 3%. [.SS] Evergrande, the embattled developer, said late on Sunday it was unable to issue new debt due to an ongoing investigation into its main domestic subsidiary, Hengda Real Estate Group Co Ltd, the latest trouble in firming up a debt restructuring plan. S&P on Monday lowered its forecast for China's economic growth to 4.8% in 2023 from 5.2%, and to 4.4% in 2024 from 4.8%, saying the fiscal and monetary easing had remained limited. "Policymakers' emphasis on containing leverage and financial risks has increased the bar for macro stimulus," said Louis Kuijs, Asia-Pacific chief economist. Markets will be looking for clues on whether China's economy is regaining traction, with a week-long national holiday set to begin on Friday that will be a key test for consumer spending. The big test in the week ahead would be the manufacturing and services PMIs on Saturday. BOND ROUT Bond investors were still smarting from the U.S. Federal Reserve's more hawkish rate projections, which caught markets by surprise. Coupled with the recent resilience in the U.S. economy, markets now see about a split chance that the Fed would resume hiking in December, while drastically scaling back rate cut expectations to just 65 basis points next year. U.S. central bank officials will be out in force this week, starting with Minneapolis Fed President Neel Kashkari on Monday. "What's driven the move this year is the acceptance that inflation shock isn't transitory, but is going to require restrictive monetary policy for much longer than we first thought," said Andrew Lilley, chief rates strategist at Barrenjoey. "For bonds to rally globally, we're going to need a coordinated rate cutting cycle, particularly from the Fed. Personally I don't see the Fed cutting in 2024, so I don't think that 2024 will be a particularly good year for bonds either." Ten-year Treasury yields inched up 3 basis points to 4.4662% on Monday, after retreating from a 16-year high of 4.508% on Friday. Two-year yields were little changed at 5.1162%, having fallen from a 17-year top of 5.2020% hit last week. Much will depend on U.S. data. In a sign of slowing growth, U.S. business activity was basically at a standstill in September, with the vast services sector essentially idling at the slowest pace since February. The Fed's favoured inflation gauge, the core Personal Consumption Expenditures Price Index, is expected to show a 3.9% annual increase in August, easing from 4.2%. Other U.S. data in the week includes final Q2 GDP. Euro zone preliminary inflation figures for September are due on Friday and are expected to ease to 4.5% annually from 5.2% in August. Markets are expecting that the European Central Bank is done hiking. In the broader currency market, the dollar was on the front foot, extending its gains from last week. The yen last traded at 148.37 per dollar, after touching a fresh 10-month low of 148.49 earlier in the day. Oil prices resumed their climb on Monday, not far from their 10-month highs. Brent crude futures rose 0.6% to $93.79 per barrel. U.S. West Texas Intermediate crude futures were also up 0.5% at $90.44. Gold was 0.1% lower at $1,922.76 per ounce.

By Kevin Buckland TOKYO (Reuters) - Asian shares sank on Tuesday as worries about the Chinese property sector weighed on markets from Hong Kong to Australia, while Japanese investors sold chip stocks on their return from a holiday-extended weekend. Benchmark U.S. Treasury yields hovered near 16-year peaks and the dollar held close to six-month highs as traders braced for a Federal Reserve rate decision on Wednesday, in a week that also sees policy decisions from the Bank of Japan and Bank of England, among others. Crude oil continued its rally amid tightening supply, stoking worries about stagflation. MSCI's broadest index of Asia-Pacific shares slipped 0.3%. Japan's Nikkei tumbled 1.1% under the weight of big losses for chip-related stocks including Tokyo Electron and Advantest. Japanese markets were closed Monday, when Asian tech stocks sold off following a Reuters report that TSMC had asked its major vendors to delay deliveries. That stock sank 0.4% on Tuesday, flipping from an earlier gain of as much as 0.6%. It tumbled 3.2% on Monday. John Pearce, CIO at Unisuper, called the TSMC news "surprising." "The one thing you were almost certain of was that demand for semiconductors was only one way," he said. Hong Kong's Hang Seng declined 0.1%, with a subindex of tech stocks sliding 0.6%. An index of mainland blue chips fell 0.3%. Chinese property stocks were volatile, with a subindex of Hang Seng developers dropping as much as 1.2% at one point, before flipping to positive territory around lunchtime, although it was last off 0.4%. Australia's stock benchmark dropped 0.4%, sagging under the weight of mining stocks amid pessimism over Chinese demand. Providing some rays of hope, though, Country Garden won approval from creditors to extend repayment on another onshore bond, the last in the batch of eight bonds it has been seeking extensions for, sources said. Peer Sunac China Holdings got creditor approval for its $9 billion offshore debt restructuring plan, the first green light of a debt overhaul by a major Chinese developer. Weakness in Asian equities weighed on U.S. stock futures, which pointed 0.1% lower. Pan-European Stoxx 50 futures were flat. Currency markets were subdued, with the U.S. dollar index - which measures the currency against six major peers - rising 0.09% to 105.17, edging back toward last week's six-month peak of 105.43. The dollar added 0.1% to 147.75 yen, bringing it closer to last week's 10-month top of 147.95. The euro eased 0.1% to $1.0679. Ten-year yields were little changed at just above 4.31%, holding close to the 4.366% level reached on Aug. 22, which was the highest since 2007. "You can't blame people for keeping to the sidelines for now," with the Fed headlining a parade of central bank meetings this week, Kyle Rodda, senior financial market analyst at Capital.com, wrote in a note. "Given the variability in outcomes, there will inevitably be crosscurrents in the markets," Rodda said. "Price action could be choppy, with risk needing to be managed more carefully." Traders are all but certain the Fed will leave rates steady again at the conclusion of a two-day meeting that begins later Tuesday, but are split on the chances on another quarter-point increase by year-end. Fed officials will also release their latest predictions on the economy and where rates are likely to be over the coming quarters. Meanwhile, oil prices rose in early trade on Tuesday for the fourth consecutive session, as weak shale output in the U.S. spurred further concerns about a supply deficit stemming from extended production cuts by Saudi Arabia and Russia. U.S. West Texas Intermediate crude futures rose 99 cents, or 1.1%, to $92.47, while global oil benchmark Brent crude futures rose 58 cents, or 0.61%, to $95.01 a barrel. [O/R] "Given how supply-constrained energy markets are likely to become, especially amidst harsher weather approaching the end of the year, higher oil prices are both an upside risk to inflation and a downside risk to growth," Capital.com's Rodda said. "Markets that don't export energy and suffer from energy insecurity could underperform."

By Stella Qiu SYDNEY (Reuters) - Asian shares fell after Wall Street wobbled overnight with markets bracing for key U.S. inflation data on Wednesday, while an oil price spike stoked anxiety about persistent price pressures, complicating the interest rate outlook. The euro was supported by a hawkish shift in expectations for the European Central Bank on Thursday, with bets now favouring a hike, after a Reuters report that the ECB expects inflation will stay above 3% next year in its updated forecasts. Europe is set to open lower, with EUROSTOXX 50 futures falling 0.5%. Both S&P 500 futures and Nasdaq futures were mostly unchanged. In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.3% while Tokyo's Nikkei eased 0.1%. Chinese blue-chips dropped 0.7% on still-fragile sentiment about the outlook for the world's second largest economy. Hong Kong's Hang Seng index reversed earlier gains to be mostly flat. At the forefront of markets' minds is the crucial U.S. Consumer Price Index (CPI) report expected on Wednesday, which should shed further light on the inflation outlook and provide some clarity about whether the Federal Reserve is done tightening. While core CPI is seen cooling to 4.3% year-on-year in August from 4.7%, rising energy costs are forecast to keep headline inflation elevated at 3.6%. And the latest spike in oil prices to ten-month highs is unlikely to escape the Fed's attention. "What's happening with oil and headline inflation is still too soon for the Fed to be signalling the all clear as far as the risks of some incremental tightening before they're done," said Ray Attrill, a currency strategist at National Australia Bank (OTC:NABZY). "When you have those sort of volatility in the food and energy components, the worry is that if it's persistent then it does tend to bleed into core inflation measures over time." Oil prices extended gains on Wednesday. Brent crude futures settled 0.3 higher at $92.31 per barrel, nearing a ten-month peak that it hit a session ago, while U.S. West Texas Intermediate crude futures were up 0.3% at $89.13. [O/R] On Wall Street, the S&P 500 fell 0.6% overnight, the Nasdaq declined 1% while Dow Jones was mostly flat. Apple (NASDAQ:AAPL) dropped 1.8% after unveiling new iPhones while not increasing prices as it faces a global smartphone glut, and Oracle (NYSE:ORCL) shares tumbled more than 13% after the cloud-services provider forecast current-quarter revenue below targets. The euro was supported at $1.0753, nearing one-week highs on the Reuters story, while markets moved to favour a rate hike from the ECB on Thursday with a 75% probability, compared with a split chance previously. "The leak raises the possibility of a hawkish hike which would be much more supportive for the EUR," said Steve Englander, global head of G10 FX research at Standard Chartered (OTC:SCBFF), referring to the Reuters report. "Our baseline view is that the ECB will signal a hawkish hold and be deterred by soft growth from further hikes... We think it is a close call." The U.S. dollar recovered some of its recent losses against the yen, up 0.2% to 147.35 yen after comments from Japan's top central banker on a possible early exit from its negative interest rate policy sent the Japanese currency soaring. [FRX/] Treasury yields climbed on Wednesday, with the two-year note touching 5.0263%, compared with a U.S. close of 5.005%. Ten-year yields held at 4.2842%, up from the close of 4.264%. Gold price was flat at $1,911.29 per ounce.

Here is another thrust signal, this one coincides well with the time at which the Ten Year rate dropped below/stayed below 4.25%.