Thursday 31st January: Asian markets gain as Fed signals slowdown in rate hikes

Global Markets:

• Asian Stock Markets : Nikkei up 1.11%, Shanghai Composite down 0.07%, Hang Seng up 0.88%, ASX down 0.37%
• Commodities : Gold at $1318.70 (+0.67%), Silver at $16.01 (+0.53%), Brent Oil at $62.08 (+0.88%), WTI Oil at $54.59 (+0.66%)
• Rates : US 10-year yield at 2.683, UK 10-year yield at 1.258, Germany 10-year yield at 0.185

News & Data:

• (CNY) Manufacturing PMI 49.5 vs 49.3 expected
• (USD) Federal Funds Rate <2.50% vs <2.50% expected
• (USD) ADP Non-Farm Employment Change 213K vs 180K expected
• (GBP) Net Lending to Individuals m/m 4.8B vs 4.3B expected
• (EUR) German Prelim CPI m/m -0.80% vs -0.90% expected
• BoJ’s Amamiya: Fed policy that keeps US economy strong is good for Japan’s economy too
• Fitch affirms New Zealand at AA; outlook stable

Markets Update:

Asian stock markets are higher on Thursday following the overnight gains on Wall Street after the U.S. Federal Reserve left interest rates unchanged as expected and also said it will be patient regarding further rate hikes.

Fed Chairman Jerome Powell noted in his press conference that the “case for raising rates has weakened somewhat.” Investors also digested data showing that China’s manufacturing activity contracted for a second straight month in January.

The mainland Chinese markets rose in the morning session, before swaying into the red later in the day. The Shanghai composite trading flat and the Shenzhen component lost 0.63%. Meanwhile, Hong Kong’s Hang Seng index gained 0.88 percent. Elsewhere in Asia, the Nikkei 225 and Topix in Japan saw gains of 1.11 percent and 1.08 percent, respectively, as shares of Japanese conglomerate Softbank Group jumped more than 4.7 percent. In Australia, the ASX 200 traded lower by 0.37% although the sectors traded mixed.

In currencies, the dollar index against a basket of six major currencies stretched the previous day’s losses and slipped to a three-week low of 95.204. The greenback was slipped about 0.3 percent to a two-week low of 108.695 yen. The pound was a shade higher at $1.3127 , given some reprieve after slipping earlier in the week when British lawmakers voted down a proposal in parliament that could have prevented a potentially chaotic “no-deal” Brexit.

The benchmark 10-year U.S. Treasury yield extended its decline to as far as 2.674 percent, its lowest since Jan. 14. Oil prices rose after U.S. government data showed signs of tightening supply and as investors remained concerned about supply disruptions following U.S. sanctions on Venezuela’s oil industry.

Upcoming Events:

• 09:00 AM GMT – (EUR) Spanish Flash GDP q/q
• 11:00 AM GMT – (EUR) Prelim Flash GDP q/q
• 02:30 PM GMT – (CAD) GDP m/m
• 02:30 PM GMT – (CAD) RMPI m/m
• 02:30 PM GMT – (USD) Core PCE Price Index m/m
• 02:30 PM GMT – (USD) Employment Cost Index q/q
• 02:30 PM GMT – (USD) Personal Spending m/m
• 03:45 PM GMT – (USD) Chicago PMI
• 05:00 PM GMT – (EUR) German Buba President Weidmann Speaks
• 06:30 PM GMT – (CAD) Gov Council Member Wilkins Speaks
• &more…