- Asian shares stay positive as Fed tames reflation fears with no imminent rate hikes signals.
- Pacific nations have GDP, employment figures to justify the pullback.
- Chatters over BOJ, Tokyo emergency add strength to Japanese markets.
- Sino-American talks, BOE and US Jobless Claims will be the key.
Asian equities cheer the US Federal Reserve’s refrain from suggesting near-term rate hikes on early Thursday. However, markets in Australia and New Zealand seem to worry about scaling back of easy money as domestic catalysts improve. Also, the US-China tussle ahead of today’s key meeting offers an extra burden on the Pacific nations by press time.
Against this backdrop, MSCI’s index of Asia-Pacific shares outside Japan gain over 1.0% whereas Japan’s Nikkei 225 benefits from calls of no emergency in Tokyo and BOJ’s likely widening of the interest rate targets, up 0.90% on a day, while heading into the European session.
Alternatively, Australia’s ASX 200 drops 0.75% on strong Aussie employment figures whereas New Zealand’s NZX 50 follows the suit, despite downbeat GDP, amid concern that the first virtual meeting between the US and China won’t reverse Trump-era moves. It should, however, be noted that Bloomberg’s headline suggesting Beijing’s readiness for another meeting next month, if today’s talks are production, seems to keep the bulls hopeful.
Elsewhere, markets in China track Wall Street to recover some of the latest losses and South Korean KOSPI follows the suit as Bank of Korea signals intervention if needed. Furthermore, Indonesia’s IDX Composite rises 0.80% ahead of the Bank Indonesia policy decision, up for publishing around 07:30 GMT, while India’s BSE Sensex copies the upbeat trades even as covid fears return in the Asian nation.
It’s worth mentioning that the US-China jitters stop S&P 500 Futures from refreshing record top even if the Fed laid the ground for stocks rally. On the same line, the US 10-year Treasury yield gains 3.2 basis points (bps) to poke the fresh high since February 2020 marked the previous day.
Moving on, global investors will be interested in re-reading the Fed as some lesser-known facts suggest discomfort among the policymakers. Also likely to probe market players will be the hopes of disappointment from the Bank of England (BOE) and weekly US jobless data.
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