Reliance Trading Co. Limited – Asian Markets Positive – Fed and Brexit Update
Asian stocks edged higher Wednesday, with positive sentiment kept in check after a Wall Street advance fizzled as investors found little in Federal Reserve Chairman Jerome Powell's Congress testimony to extend the recent rally.
By: Reliance Trading Co. Limited
Equities posted modest gains in Japan, Australia, Hong Kong and China. Earlier, the S&P 500 Index dropped in the final hour of trading to close in the red after Powell warned that growth looked uneven and policy makers will be patient on interest-rate adjustments. The pound retained gains spurred by a promise from U.K. Prime Minister Theresa May for a vote to delay Brexit if her proposed deal fails. Trading was impacted in many futures markets due to a technical problem at CME Group Inc.
Powell said with inflation pressures muted and ongoing government policy uncertainty, a patient approach to future policy changes was warranted. "Going forward, our policy decisions will continue to be data dependent and will take into account new information as economic conditions and the outlook evolve,'' he told the Senate Banking Committee.
Investors are still grappling with a host of uncertainties from further developments on trade to Brexit that could rein in a recovery in global equities from December lows. Meanwhile, U.S. President Donald Trump is in Hanoi for a second summit with North Korean leader Kim Jong Un.
Elsewhere, crude oil climbed, reversing a loss from earlier in the week that were spurred by criticism from President Donald Trump that prices are too high.
Here are some key events coming up:
Powell delivers the second half of his semiannual testimony on monetary policy and the state of the economy to a House committee Wednesday. President Donald Trump and North Korea leader Kim Jong Un meet for a second summit on Wednesday. Thursday brings fourth quarter U.S. GDP.
These are the main moves in markets:
The MSCI Asia Pacific Index added 0.2 percent as of 9:30 a.m. in Hong Kong. Japan's Topix index rose 0.2 percent. Australia's S&P/ASX 200 Index gained 0.3 percent. South Korea's Kospi added 0.1 percent. Hong Kong's Hang Seng Index added 0.2 percent. The S&P 500 Index fell about 0.1 percent. Futures were flat.
The yen held at 110.57 per dollar. The offshore yuan was steady at 6.6868 per dollar. The euro slid less than 0.1 percent to $1.1385.The British pound was at $1.3249 after Tuesday's surge.
The yield on 10-year Treasuries dipped to 2.63 percent. Australia's 10-year bond yield fell one basis point to 2.08 percent.
West Texas Intermediate rose 0.9 percent to $56.02 a barrel. Gold held at $1,329.12 an ounce.
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