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  • Shares in Asia followed US equities higher amid dovish Fed signals.
  • Doubts over the US-China trade deal, escalating political tensions between the US and Iran gained little attention.
  • US CPI, Fedspeak 2.0 will be followed for fresh impulse.

In addition to the US Federal Reserve Chairman Jerome Powell’s Testimony spotting downside risks to inflation, minute statement of the latest Federal Open Market Committee (FOMC) meeting also pleased global equity buyers by citing some policymakers in support of excessive rate cuts.

The Asian traders followed the suit despite on-going trade jitters between the US and China, not to mention likely escalation in the US-Iran political tension. Adding to the trade woes could be the US notice to initiate Section 301 investigation on the French Digital Services Tax (DST) Bill.

Portraying the moves, MSCI’s index of Asia-Pacific shares ex-Japan grows more than 1.0% by the time of writing while Japan’s Nikkei also adds +0.5% to the kitty. China’s Hang Seng rises 1.20% and so does Australia’s ASX 200, despite a mixed bag of data, to 0.5%.

Furthermore, New Zealand’s NZX 50 gains 0.3% and India’s BSE Sensex is on the run-up to +0.4% by the press time.

Global barometer of the risk sentiment, 10-year US treasury yields, remains on a back foot with a loss of 2 basis points to 2.04%.

Moving on, headline Consumer Price Index (CPI) data from the US and second day of the Fed Chair’s Testimony will be closely observed for fresh direction. While likely improvement in the US inflation can help the US Dollar (USD)to recover the latest losses, any upbeat statement from Powell’s testimony can reverse the latest anti-USD momentum.