Asian stocks fall as investors eye central bank hikes

On Tuesday, Asian shares traded cautiously and bonds suffered minor losses as investors braced for a busy week of central bank meetings, earnings reports, and key U.S. economic data.

The Federal Reserve of the United States is widely expected to raise interest rates by 25 basis points (bps) on Wednesday. Both the Bank of England and the European Central Bank are expected to raise interest rates by 50 basis points on Thursday.

Meanwhile, more than 100 S&P 500 companies, including Apple, Amazon.com, and Google parent Alphabet, are expected to report earnings this week, as well as the release of closely watched U.S. employment figures.

"It's a big week for both central banks and US equities, with... some of the household names due to make earnings announcements that will provide a micro overview of the macro economy," ANZ analysts wrote in a note.

"We anticipate a 25 basis point (bps) rate increase and anticipate the Fed will warn against an early pause in the tightening cycle... Risk appetite may be vulnerable to a correction."

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.1% early in the Asian trading day. The S&P 500 e-minis in the United States rose 0.1%.

The Nikkei stock index in Japan fell 0.1%, while Australian shares rose 0.2%.

In early trade, China's blue-chip CSI300 index remained unchanged. The Hang Seng index in Hong Kong opened 0.4% higher.

On Monday, U.S. stocks fell, with the major indexes sinking as shares of technology and other large corporations fell.

The Dow Jones Industrial Average fell 0.8% to 33,717.09, the S&P 500 fell 1.3% to 4,017.77, and the Nasdaq Composite fell 2.0% to 11,393.81.

Despite Monday's losses, the S&P 500 was on track to post its largest January gain since 2019.

Investors will be watching Chair Jerome Powell's news conference at the end of the Fed's two-day policy meeting on Wednesday for clues on whether the rate-hiking cycle is coming to an end, as well as indications of how long rates could remain elevated.

Markets will also deal with a deluge of US economic data, culminating in Friday's January payrolls report. Investors see signs of labour market weakness as a key factor in bringing down high inflation.

Treasury yields in the United States remained firm ahead of central bank meetings and economic data, with the yield on benchmark 10-year Treasury notes US10YT=RR standing at 3.5384 percent, up from 3.551 percent on Monday.

The two-year yield, which rises as traders expect higher Fed fund rates, reached 4.2402 percent, compared to 4.261 percent at the close in the United States.

In terms of currencies, the US dollar was down at 102.19 against a basket of other major currencies, heading for its fourth month of declines.

The European single currency was up 0.1% on the day at $1.0852, after rising 1.4% in a month.

Oil prices fell on Monday ahead of expected central bank hikes and signs of strong Russian exports in the energy market.

Crude oil in the United States rose 0.2% to $78.02 per barrel, while Brent crude settled at $84.9 per barrel early in the Asian session.

Gold was marginally higher. The spot price of gold was $1922.91 per ounce.