Wall Street lost ground overnight, ending near worst levels as worries about the impact of further interest rate hikes mounted and crude prices advanced over aborted Russian mutiny over the weekend. Tech and mega-cap stocks led the losses as traders unwound bets that the Fed will cut interest rates this year, NASDAQ down 1.16%, and the S&P 500 fell by 0.45%, while the Dow Jones edged marginally lower, down 13 points (-0.04%). Dow at best up 91 points. Dow at worst down 117 points. VIX Volatility Index up 6%.  Among stocks, Alphabet (GGOGL.O) down 3.19% after UBS downgraded the stock to neutral, while Tesla (TSLA.O) fell 6.06% after Goldman Sachs downgraded its rating to neutral. On the positive side, US regional bank PacWest (PACW.O) jumped 4.01% after private equity firm Ares Management said it had acquired a US$3.5bn specialty finance loan portfolio from the lender. US 2Y and 10Y treasury yields inverted further to 102bps, only 8bps away from the historic inversion of 110bps after the US regional bank shock in March. The probability of a rate hike at the next FOMC meeting is currently at 74.4%.  

• Australian market to open up. SPI futures up 20 points (+0.28%).
• Gold finished 0.1%, climbing from a 3-month low as safe-haven assets become more attractive in the wake of Russian turmoil.
• Copper climbed 1.3% as all other base metal prices dropped on a worsening economic outlook and a decrease in German business moral.
• Nickel -4.7% Aluminium -1.19% Zinc -1.31%, Lead -2.56%, Tin -3.73%.
• WTI Crude rose 0.26% and Brent gained 0.74% on concerns of supply issues from Russia.
• 10-year yield: US 3.72%, Australia 3.91%, and Germany 2.3%.

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