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To: Hawkmoon who wrote (37981)	7/29/1999 9:00:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116759

Asia markets slip on U.S. rate rise fears SYDNEY, July 30 (Reuters) - It was all downhill for Asia-Pacific markets on Friday after a Wall Street sell-off sparked by fears of an imminent U.S. interest rate hike. Japanese, Australian and New Zealand equity markets all slid early -- New Zealand's NZ-40 index losing as much as 0.8 percent early before regaining some ground. Japan's Nikkei 225 index and Australia's All Ordinaries index lost 0.6 percent and 1.1 percent respectively in initial business. The Dow Jones Industrial Average dived 180.78 points or about 1.65 percent to 10,791.29 on Thursday and the U.S. long bond yield jumped to 6.07 percent after the U.S. employment cost index soared 1.1 percent in the second quarter of 1999, compared to a modest 0.4 percent increase in the first quarter. That rise followed warnings by U.S. Federal Reserve Chairman Alan Greenspan about inflationary pressures in the U.S. econonmy. ''The ECI, given Greenspan's Humphrey Hawkins testimony, has put the markets on a high level of alert for an interest rate rise,'' said Richard Gibbs, senior international economist at Macquarie Bank. ''Many in the markets have brought forward the risk of a U.S. rate rise to the August FOMC meeting and that will affect Asian markets with the prospect of imminently higher U.S. rates feeding through to those markets,'' he said. However, Gibbs said a weakening American dollar may help to overcome some of the initial effects of a hike in U.S. interest rates on the Asian region. ''Prima facie, it does suggest that the U.S. risk premium is on the rise, and if that is the case, I think we may see a more even flow of capital globally in an environment of high U.S. interest rates. That means Asian markets may not be as disadvantaged as people may first think,'' he said. The Australian dollar was settled above the US$0.65 mark in early local business, aided by a solid rise in the bullion price after the U.S. dollar came under pressure. biz.yahoo.com