Asian stocks: China’s trade-positive step adds to the market’s risk-on

China announced to cut tariffs on some of the US products by half.
Wall Street benchmarks surged to the record highs the previous day, Coronavirus keeps spreading.

Anil Panchal FXStreet

Asian equities keep the gains as a trade-positive step from China adds strength to the share market’s earlier optimism based on broadly positive fundamentals. Among them, strong economic from the US, EU and the UK as well as China’s efforts to support the market amid coronavirus fears acquire front seats.

During early Thursday, China crossed wires, via Reuters, while saying that
the tariffs on some US goods will be cut to half. The action could be to gain US support during phase-two talks as the coronavirus is likely to push Beijing off promises made during the phase-one agreement.

Elsewhere, coronavirus has so far claimed more than 540 lives in China while infecting +28,000. Even so, Chinese authorities stay ready to infuse markets and fight against the challenge. On the data front, key activity numbers and the early signals to the US employment data flashed upbeat signals on Wednesday.

While portraying optimism, the MSCI’s index of Asia-Pacific stocks ex-Japan rises nearly 1.7% whereas Japan’s NIKKEI gains more than 2.5% to 23,905 by the press time of the pre-European session on Thursday. Further, stocks in China and Hong Kong are more than 1.0% in gains whereas Indian equities await the Reserve Bank of India’s (RBI) monetary policy decision for fresh impulse.

The US 10-year treasury yields add three basis points (bps) to 1.68% by the time of writing. This inflates the bond coupon’s three-day gain to 17 bps.

Traders will now keep eyes on the US reaction to the Chinese announcement as well as economic calendar ahead of the key jobs data from the US on Friday.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

GBP/USD slides below 1.3250 after failing to break through 23.6% Fibo

The GBP/USD pair meets with a fresh supply during the Asian session on Wednesday and moves away from a nearly two-week high around the 1.3275 region, touched the previous day. Spot prices currently trade around the 1.3235 zone, down 0.20% for the day, as traders look to speeches from Bank of England Governor Andrew Bailey and Federal Reserve Chair Kevin Warsh for a fresh impetus.

EUR/USD stays offered, breaks below 1.1400…again

EUR/USD adds to Tuesday’s slight losses and drops below the 1.1400 yardstick in the latter part of Wednesday’s NA session. The pair’s decline comes in response to the persistent recovery in the US Dollar, which seems to have met extra support following the cautious tone from Fed’s Warsh in his comments at the ECB Forum.

Gold recovers but sellers hold the grip

Gold keeps the bullish performance in place on Wednesday, although is now giving away part of its earlier advance past the $4,100 mark per troy ounce. The precious metal’s marked rebound comes despite the US Dollar’s bid bias, higher US Treasury yields across the curve and positive headlines from the Middle East.

Morpho surges as Standard Chartered projects $60 price by 2030

Standard Chartered has initiated coverage of decentralized finance lending protocol Morpho, forecasting its native token could reach $60 by the end of 2030 as the sector expands and institutional adoption of onchain finance accelerates.

Warsh stays on message as inflation remains the Fed's top priority

At the ECB Forum in Sintra, Fed Chair Kevin Warsh largely followed the script, offering little to change the market’s current view on monetary policy.

Just like Fed, is BoJ’s independence under threat?

When talking about central bank independence, most of the focus has been on Donald Trump’s pressure on the Federal Reserve. But a similar story, a quieter one for now, seems to be happening on the other side of the Pacific: Japan’s government may be testing the Bank of Japan’s independence.