- Asian shares benefit from the Fed Chair’s cautious statements.
- Fears of US-China trade war, UK election checks the risk-on.
Asian equities are on the front foot, with the MSCI’s index of Asian Pacific shares rallying to the monthly top, as traders consider the US Federal Reserve (Fed) Chairman’s comment as dovish. Fed Chair Jerome Powell stepped back from any upbeat comments while giving high importance to inflation for the next year’s rate hikes. The Federal Open Market Committee’s (FOMC) stood pat on monetary policy while expecting no change in Gross Domestic Product (GDP) and rate hikes in 2020.
Japan’s NIKKEI registers 0.33% gains to 23,455 while Chinese shares are struggling between gains and losses amid fears of a trade war between the United States (US) and China. The US President Donald Trump will today meet his trade advisers to take a decision on the tariffs ahead of the December 15 deadline. Goldman Sachs anticipates the US will eventually scrap the tariffs.
Markets in India are cautiously optimistic ahead of the monthly Industrial Output data while that of Indonesia, Philippines and Australia stay on the back foot amid trade jitters and calls of slower growth of the Chinese economy.
With this, the US 10-year treasury yields recover initial losses to 1.80%. Also contributing to the market’s risk tone is the general election in the United Kingdom (UK) where a clear parliamentary victory by the Conservatives is a must to witness a soft Brexit.
Additionally, nearness to monetary policy meetings in Europe and Switzerland, coupled with a lack of major data, keep the equity bulls in check.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.