- Asia-Pacific markets remain mildly bid amid an inactive session.
- RBA’s hints of peak in inflation, China’s readiness for more stimulus keep buyers hopeful.
- Fears of Sino-American tension, anxiety ahead of Fed Chair Powell’s testimony restrict immediate moves.
Equities in the Asia-Pacific region keep the buyers on their table as markets anticipate dovish comments from Fed Chair Jerome Powell during the all-important semi-annual testimony. Adding to the optimism could be the headlines surrounding the Reserve Bank of Australia (RBA) and China, as well as upbeat data from Australia and Beijing. However, the cautious mood ahead of the key event restricts the market mood, aided by the Indian holiday.
While portraying the mood, the MSCI’s index of Asia-Pacific shares ex-Japan rises around 0.40% intraday whereas Japan’s Nikkei 225 copies the move to 28,335 amid early Tuesday.
That said, the Reserve Bank of Australia (RBA) matches market forecasts of lifting the benchmark interest rate by 25 basis points (bps) to 3.60%. However, the RBA Statement saying, “The Consumer Price Index (CPI) indicator hints at the inflation peak” seemed to have favored the Aussie equity traders. Furthermore, an improvement in the Aussie Export and Import numbers superseded the fall in the trade surplus and favored the optimists in Canberra. As a result, Australia’s ASX 200 rises half a percent at the latest.
On the other hand, an improvement in China’s international trade figures for February joins the hopes of more stimulus from the Communist Party to underpin positive mood in China, led by a nearly 1.0% intraday gain of the Hang Seng.
Elsewhere, fears of fresh US-China tussles, due to the likely meeting between the officials from the US and Taiwan, as well as amid Beijing’s criticism of Washington’s cold war strategies, join the dovish hopes from Fed Chair Powell to probe the market’s momentum.
It’s worth noting that stocks in New Zealand print mild gains amid a lack of a major fresh catalyst while India’s holiday adds to the Asia-Pacific markets’ inaction.
On a broader front, S&P 500 Futures print mild gains around a two-week high marked the previous day, up 0.15% intraday near 4,060 at the latest. However, US 10-year Treasury bond yields fade bouncing off a one-week low of 3.897% marked on Monday.
Moving ahead, a lack of major data/events before Fed Chair Powell’s testimony may restrict the market moves amid caution. Though, any hawkish surprise from Powell won’t be taken lightly.
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