- Asian equities remain on the back foot as global policymakers renew fears of economic backlash.
- Aussie data, New Zealand budget and comments from US diplomats add to the risk-off.
- Fed Chair Powell tried to rule out negative rates, US President Trump disagrees with him.
- German inflation data can offer intermediate clues ahead of US Jobless Claims.
Asian shares remain on the back foot as fresh fears of the coronavirus (COVID-19) wave 2.0, coupled with its harsh economic impact, loom over the global economy. The latest data from Germany and China continues to suggest that the virus has regained momentum as the economies as trying to ease lockdown measures. Also favoring the bears could be comments from the World Health Organization (WHO) that the virus may never go away.
Elsewhere, the policymakers and data kept the pessimism on. Not only downbeat comments from the US Fed Chair Jerome Powell but worries struck by US Treasury Secretary Steve Mnuchin also keep risk-tone heavy off-late. Adding to the risk-off could be downbeat Aussie employment data and New Zealand budget forecasts.
While portraying the risk-off mood, MSCI’s index of Asia-Pacific shares outside Japan drops 0.89% whereas Japan’s NIKKEI prints a 1.5% loss to 9,970 by the press time of the pre-Europe session on Thursday.
Stocks in China also fail to cheer increasing odds of another rate cut from the People’s Bank of China (PBOC) whereas those from India reverse the previous day’s gains with over 1.0% in the red.
Australian employment figures and worrisome forecast within New Zealand budget release join US-China and Aussie-Sino tussle to drag the ASX 200 and NZX 50 down by around 1.0%. Further, South Korea’s KOSPI also registers over 20 points, 1.25%, of losses to 1,916 as the latest updates suggest an increase in the nightclub-linked virus expansion.
It’s worth mentioning that the US 10-year Treasury yields decline 1.5 basis points (bps) to 0.636% whereas stock futures also decline as Fed Chair Powell and US President Trump cross each other on Fed rate outlook.
Looking forward, second-tier economic details on the calendar could entertain traders while virus/trade updates are the key.
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