Asian Shares Stood Firm Waiting for Fed Policy
Asian shares on Thursday sit still while concerns for the outlook for U.S. interest rates and the possibility of global stimulus wear out markets.
In addition to that, every move was tiny. The MSCI’s broadest index of Asia-Pacific shares across Japan trimmed 0.2% in very slight volumes.
On the other hand of Asian shares, Japan’s Nikkei edged 0.1% higher just like what happened with Shanghai blue chips. Then, E-Mini futures for the S&P 500dropped 0.04%. And EURO STOXX 50 futures eased 0.09%.
Aside from that, the optimistic results from retailers surprisingly saved Wall Street’s situation. And also, it made Target Corp boost as much as 20%, and Lowe’s Cos was up by 10%.
On Wednesday, Dow ended the day rising by 0.93%. Similarly, Nasdaq rose 0.90%.
In the July meeting of the Federal Reserve, it revealed policymakers have a deeply different opinion on cutting interest rates. However, the whole Fed united in a wanting to hint they were not on a preset path for more easing.
Moreover, some of the Fed members voted for a further cut by half a point. However, most of them favored not to change the current interest rate at all. But the reluctance did not seem to stick with the market’s aggressive pricing above 100 basis points of easing until the end of 2020.
Meanwhile, Treasuries were sold in response. And two-year yields left at 1.58%, unlike last week’s low of 1.467%.
Senior FX strategist Rodrigo Catril stated, “The key message from the Fed minutes is that the 25 basis-point cut in July was just a calibration.”
He added that it was also just a mid-cycle adjustment. And it will not be the beginning of a new easing cycle.
Furthermore, anticipation for U.S. fiscal stimulus had a knock after President Donald Trump reversed course. And he announced that he was not planning at cutting payroll taxes.
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