- Asian equities alternate gains with losses near multi-day top.
- Risk-tone reshuffles following US President Donald Trump’s speech.
- ECB is expected to add 500 billion Euros to its Pandemic Emergency Purchase Programme (PEPP).
- US Jobless Claims will also offer near-term trading directions.
Asian shares fade the early week’s upside momentum amid the quiet session ahead of the European trading on Thursday that will take clues from the European Central Bank’s (ECB) monetary policy meeting. In addition to the pre-event cautious mood, comments from US President Donald Trump also portrayed the risk reset and triggered the US dollar bounce from a three-month low.
US President Trump struck an upbeat tone, as far as the economic recovery is concerned, while stepping back from military use to tame the riots. Additionally, the Republican leader also turned down hopes of any sanctions on Chinese President Xi Jinping due to his role in the Hong Kong issue. However, the Trump administration levied extra restrictions on Chinese media outlets. It should also be noted that the US further tightens strings for Chinese airlines, which in turn weigh on the risk-tone.
Having said that, the US dollar bounces off March month low to 97.48, up 0.16% on a day, as we write. Further, the US 10-year Treasury yields and the US stock futures also part ways from the previous day’s upbeat performance amid risk reset.
Looking at the Asia-Pacific markets, the MSCI’s gauge of Asia-Pacific shares outside Japan rises 0.15% but Japan’s Nikkei trim early-day gains to 22,713, up 0.44% daily, by the press time.
Moving on, Australia’s ASX 200 cheers upbeat Trade Balance and Retail Sales figures, as well as the announcement of further infrastructure spending. On the contrary, New Zealand’s NZX 50 follows the footsteps of its Aussie counterpart despite cautious comments from the country’s Foreign Minister Winston Peters. Furthermore, markets in India and China struggle for a clear direction but those from Indonesia and South Korea benefit from the domestic catalysts.
Given the likely market-positive announcement from the ECB, any disappointment from the result or President Christine Lagarde could add a burden on the market’s risk-tone and may extend the US dollar recovery.
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