'Risk on' as Powell signals Fed still on easing track
By Jamie McGeever
Nov 8 (Reuters) -A look at the day ahead in Asian markets.
Asian markets on Friday round off a monumental week on the front foot after Federal Reserve Chair Jerome Powellon Thursday expressed confidence in the U.S. economy and that inflation will continue to cool, signaling further interest rate cuts ahead.
In his press conference after the Fed cut rates by 25 basis points as expected, Powell said the economy could perform better next year than previously thought, and that inflation remains on a path back to the2% target.
This added fuel to the U.S. equity rally already underway following Donald Trump's thumping victory in the U.S. presidential election on Tuesday, pushing the three main U.S. indices to new all-time highs.
The equity rally was also aided by lower Treasury yields and a weaker dollar - the 10-year yield fell 10 basis points for its biggest one-day fall in three months, and the dollar shed 0.7%.
Asian stocks ex-Japan go into Friday's session up almost 2% on the week, which would be the biggest rise in five weeks. Over the month of October though, outflows rose sharply.
Japan's Nikkei is up 3.5%, on course for its best week in six. Many analysts are increasingly bullish on Japanese stocks, citing attractive valuations and an assumption that the yen stays weak.
The outlook for Asian stocks in a Trump world more broadly, however, is mixed.
On the one hand stronger demand and a buoyant Wall Street are positive forces for emerging Asia. But on the other, a stronger dollar and higher U.S. bond yields could tighten financial conditions and encourage capital outflows from some countries.
Chinese stocks, in particular, are vulnerable. But as SocGen analysts note, the threat of punishing tariffs from Washington could accelerate more forceful policy responses from Beijing, which may end up supporting local stocks.
Meanwhile, attention in Asia turns to China as investors await a readout from the National People's Congress Standing Committee meeting which concludes on Friday. Any stimulus surprise from the meeting will likely help lift market sentiment in China stocks.
The yuan on Thursday bounced back a bit from the three-month low struck the previous day. The yuan's fall on the spot market of around 1% on Wednesday, an immediate reaction to Trump's election win, was its biggest decline since February 2020.
Investors will also cast an eye to Chinese inflation data on Saturday. Strong exports data on Thursday offered encouraging signs that growth may be recovering, but imports fell short of forecasts, suggesting domestic demand remains weak.
The annual rate of consumer inflation is expected to have held steady at 0.4% in October, according to a Reuters poll, while producer price deflation is seen easing only a little to -2.5% from -2.8%.
Here are key developments that could provide more direction to markets on Friday:
- Taiwan trade (October)
- Japan household spending (September)
- China NPC Standing Committee readout
U.S.-Japanese yield spreads https://tmsnrt.rs/4fmZVkE
Major global stock markets YTD performance https://tmsnrt.rs/4ffmLKF
Reporting by Jamie McGeever; Editing by Deepa Babington
Ativos relacionados
Últimas notícias
Isenção de Responsabilidade: As entidades do XM Group proporcionam serviço de apenas-execução e acesso à nossa plataforma online de negociação, permitindo a visualização e/ou uso do conteúdo disponível no website ou através deste, o que não se destina a alterar ou a expandir o supracitado. Tal acesso e uso estão sempre sujeitos a: (i) Termos e Condições; (ii) Avisos de Risco; e (iii) Termos de Responsabilidade. Este, é desta forma, fornecido como informação generalizada. Particularmente, por favor esteja ciente que os conteúdos da nossa plataforma online de negociação não constituem solicitação ou oferta para iniciar qualquer transação nos mercados financeiros. Negociar em qualquer mercado financeiro envolve um nível de risco significativo de perda do capital.
Todo o material publicado na nossa plataforma de negociação online tem apenas objetivos educacionais/informativos e não contém — e não deve ser considerado conter — conselhos e recomendações financeiras, de negociação ou fiscalidade de investimentos, registo de preços de negociação, oferta e solicitação de transação em qualquer instrumento financeiro ou promoção financeira não solicitada direcionadas a si.
Qual conteúdo obtido por uma terceira parte, assim como o conteúdo preparado pela XM, tais como, opiniões, pesquisa, análises, preços, outra informação ou links para websites de terceiras partes contidos neste website são prestados "no estado em que se encontram", como um comentário de mercado generalizado e não constitui conselho de investimento. Na medida em que qualquer conteúdo é construído como pesquisa de investimento, deve considerar e aceitar que este não tem como objetivo e nem foi preparado de acordo com os requisitos legais concebidos para promover a independência da pesquisa de investimento, desta forma, deve ser considerado material de marketing sob as leis e regulações relevantes. Por favor, certifique-se que leu e compreendeu a nossa Notificação sobre Pesquisa de Investimento não-independente e o Aviso de Risco, relativos à informação supracitada, os quais podem ser acedidos aqui.
