Asian Stock Market: Shanghai firms ahead of Fed policy and US debt ceiling issues, oil consolidates

Asian stocks are showing caution ahead of Fed policy and mounting US debt ceiling concerns.
The White House might come forward for US debt ceiling talks with the House of Republicans as Treasury will be out of funds in early June.
Chinese equities are showing strength despite the turbulent trading environment ahead of Caixin Manufacturing PMI data.

Sagar Dua FXStreet

Markets in the Asian domain are showing caution amid sheer volatility in the United States markets as investors are worried over mounting US debt ceiling issues and the monetary policy action from the Federal Reserve (Fed). S&P500 witnessed a massive sell-off on Thursday after US Treasury Secretary Janet Yellen reported that the Treasury will be out of funds in early June if the debt ceiling won’t get an extension approval.

This could force the White House to come forward for negotiations with the House of Republicans, which earlier demanded negotiations in the President’s spending initiative against the proposal of raising the debt ceiling.

At the press time, SZSE Component climbs above 1.08%, Hang Seng plunged 1.86%, KOSPI tumbled 1%, and Nifty50 dropped 0.36%.

Japanese markets are closed on account of Constitution Day.

The US Dollar Index has found an intermediate cushion after a sheer sell-off to near 101.70. The further downside in the USD Index looks genuine as the Fed is expected to sound neutral on interest rate guidance. However, an interest rate hike by 25 basis points (bps) cannot be ruled out.

Chinese equities are showing strength despite the turbulent trading environment. Indices are performing better ahead of the Caixin Manufacturing PMI data, which will release on Thursday. The economic data is expected to land at 50.3 lower than the former figure of 50.0. The Chinese economy is in recovery mode after a long period of lockdown due to pandemic curbs.

On the oil front, the oil price displayed a blood bath as central banks are preparing for accelerating interest rates further to arrest sticky inflation. Going forward, investors will keep an eye on oil inventories data, which will be released by US Energy Information Administration (EIA) for the week ending April 28.

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

AUD/USD sticks to positive bias above 0.7100; lacks bullish conviction

AUD/USD trades with a positive bias for the second straight day, holding above 0.7100 in the Asian session on Friday as softer US bond yields keep US Dollar bulls on the back foot. Furthermore, hawkish RBA Governor Bullock's comments boost rate hike bets and support the Aussie. However, the Fed's hawkish outlook, along with geopolitical uncertainties, limits USD losses and caps the pair.

USD/JPY approaches 158.00 as Japanese Yen resumes decline

USD/JPY is resuming its upside in the European session on Friday, refreshing two-week highs and nearing 158.00. The Japanese Yen extends losses, despite the Bank of Japan's (BoJ) expected rate hike to 1.25% and hawkish Governor Ueda's comments, as two surprise dissents against the rate hike weigh on it.

Gold keeps the bid tone in place; still below $4,400

Gold adds to the optimism seen in the second half of the week, trading with decent gains just below the $4,400 mark per troy ounce on Friday. The precious metal’s advance finds traction in declining crude oil prices and fresh selling pressure on the US Dollar.

Why altcoin season isn't coming back — and what stole its capital

If, after two years of being frozen in ice, Katara and Sokka woke you up to the crypto market, it would seem like 100 years have passed. With Bitcoin soaring to record highs just over a year ago, everyone expected a routine altcoin season, where investors take profits from the top crypto to chase higher returns in altcoins.

BoJ Recap: Not as hawkish as expected

The BoJ raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks. Governor Kazuo Ueda said the policy phase had changed.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.