ASX higher; IGO extends losses; RBA says financial system is strong; GrainCorp strong demand for grain; KPMG says

Stocks headed for a weekly loss on Friday as the prospect of aggressive global rate rises finally began to rattle investors, while bonds fell and the dollar looked set for its best week in a month.

MSCI’s broadest index of Asia-Pacific shares outside Japan was steady in morning trade and down about 1.5 per cent for the week so far. Japan’s Nikkei fell 0.2 per cent on Friday for a loss of almost 3 per cent for the week.

Federal Reserve policymakers are ready to start cutting the central bank’s asset holdings from May and are prepared to lift rates by 50 basis points at a time to curb inflation, meeting minutes and remarks from officials showed this week.

War in Ukraine and the shockwave it has sent through commodity prices, as well as lingering damage to supply chains from the pandemic has heaped even more pressure on consumer prices and is adding to a sense of a major shift in trends.

Risk of a populist upset in French presidential elections has also sent jitters through markets – dragging on French debt and the euro – ahead of the first round of voting on Sunday.

Elsewhere, long-end Treasuries have borne the brunt of this week’s selling in haemorrhaging bond markets as traders see it hit hardest by the Fed cutting bond holdings.

The benchmark 10-year Treasury yield is up 25 basis points to 2.64 per cent this week, and was steady in Asia trade on Friday. The 30-year yield is up 22 basis points.

The US dollar has been the primary beneficiary and the dollar index, which measures the greenback against a basket of six major currencies, hit an almost two-year high of 99.904 on Friday.

The stronger dollar, and an oil price easing with supplies being released from reserves, has also pushed commodity currencies from recent peaks and redoubled pressure on the struggling yen. Japan’s currency is near its lowest levels in years and was under pressure at 124.23 a dollar.

Brent crude futures were steady at $US100.56 a barrel and US crude futures held at $US96.17.