Asian stocks turn lower amid an eventful post-FOMC session
|- Fed’s hawkish rate cut preceded HKMA’s reaction with the same force while BOJ stood pat.
- Australia’s unemployment rate renewed fears of RBA’s rate cut, New Zealand GDP holds back RBNZ doves.
- BOE, SNB, and BI are the remaining central banks to propel markets moves while the economic calendar remains busy throughout the day.
With the US Federal Open Market Committee (FOMC) raising bars for further rate cuts, Asian equity traders stay on the back foot while heading into the European session on Thursday.
The Hong Kong Monetary Authority (HKMA) copied the Fed while announcing 0.25% to its benchmark interest rates whereas the Bank of Japan (BOJ) held its monetary policy unchanged with policy rate at -0.1% and 10-year Japanese Government Bond (JGB) yield target around 0%.
Further, New Zealand’s second-quarter (Q2) Gross Domestic Product (GDP) figures grew 0.5% QoQ against 0.4% forecast while also rising past-2.0% expectations to 2.1% level on a YoY format. Additionally, Australia’s Unemployment Rate met expectations of 5.3% mark, which was up from 5.2% prior but Employment Change crossed 10.0K forecast by rising to 34.7K.
On the trade/political front, Japan expects the US to assure no more auto levies before signing the trade deal. Moving on, France and the US stand beside Saudi Arabia to answer latest drone attack that has Iranian roots.
In a reaction, MSCI’s index of Asia Pacific shares ex-Japan flashes near 0.6% losses with Japan’s NIKKEI flashing +0.56% mark. Further, HANG SENG leads the negative side with more than 1% loss, followed by India’s BSE SENSEX and Australia’s ASX200. On the positive side, Korea’s KOSPI Index and New Zealand’s NZX 50 tried confronting the bears.
Further to note is that the market’s risk tone lost initial recovery with the US 10-year Treasury yield flashing red signals by the press time.
Looking forward, Swiss National Bank (SNB), Bank Indonesia (IB) and Bank of England (BOE) are the rest of the global central bankers that are left for fueling market moves. On the economic calendar, Swiss Trade Balance, UK Retail Sales, US Existing Home Sales, and Philadelphia Fed Manufacturing Survey could entertain momentum traders. It should also be noted that the start of lower-level trade talks between the US and Chinese officials may also offer noticeable market moves.
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