- Equities in Asian stay mostly offered as fears of more job losses renew.
- Concerns of the coronavirus second wave and the US-China tussle adds to the risk-off sentiment.
- A light calendar allows the news headlines to dominate market sentiment.
Asian shares fail to respect the US Federal Reserve’s readiness to act further while portraying the sea of red. The reason could be traced from Fed Chairman Jerome Powell’s statement suggesting the worst for the job market isn’t over. Additionally, the return of the Sino-American tension and the market’s retracement post-FOMC also pleased the bears.
Read: Powell speech: Millions of people could remain jobless once recovery takes hold
As a result, MSCI’s index of Asia-Pacific shares, ex-Japan, drop 0.70% whereas Japan’s Nikkei flashes over 2.0% loss to 22,610 by the press time of pre-European open on Thursday. Elsewhere, Australia’s ASX 200 drops nearly 3.0% and New Zealand’s NZX 50 marks over 1.0% loss as China’s Global Times criticized the Fed’s move and US Vice President Mike Pence sounded tough on China trade deal.
Furthermore, stocks in China remain mostly directionless but South Korea’s KOSPI and Indonesia’s IDX Composite praise the sellers amid pessimism in Asia. It should be noted that India’s BSE Sensex seems to shrug it all and S&P’s criticism while printing 0.30% loss as we write.
Moving on, the US 10-year Treasury yields drop to the lowest in over a week as losing three basis points (bps) to 0.718%. Also, the US stock futures extend Wall Street’s losses as the market’s fear the Fed’s downbeat forecast to come true soon.
Considering a lack of major data/events on the calendar, traders might prefer waiting for the key news concerning either the US-China standoff or any other risk catalysts for fresh impulse. Though, the weekly US Jobless Claims and Producer Price Index (PPI) for June might offer intermediate directives to the markets.
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