Asian Stock Market: Trade-war concerns dim charm of Powell’s power-play
- Asian equities trade mixed even as S&P 500 Futures, US 10-year Treasury yields mark notable gains.
- US President Trump threatens China to levy fresh sanctions.
- Japan’s CPI flashed downbeat numbers, PM Abe rolls up the sleeves for virus vaccine.
- RBNZ’s Hawksby likes Fed’s framework, Beijing halts Aussie meat from one more supplier.
Shares in Asia fail to portray the global risk-on mood as fears of Sino-American tussle weigh on the previous day’s market optimism following Fed Chair Powell’s speech. While portraying the mood, MSCI’s index of Asia-Pacific shares outside Japan rises 0.24% but stocks in Australia and New Zealand mark losses ahead of Friday’s European session. Japan’s Nikkei 225 gains 0.50% as worrisome inflation data from Tokyo battle Prime Minister Shinzo Abe’s push for huge testing and the early access to the coronavirus (COVID-19) vaccines.
US President Donald Trump said to end reliance on China during his acceptance speech to the 2020 Republican National Convention. The national leader also threatened to levy harsh sanctions after earlier warnings to the companies helping Beijing to keep the reins in the South China Sea.
It should also be noted that Chinese policymakers have so far refrained from accepting the allegations over the virus spread while showing readiness to talk the phase-one deal with the US.
Elsewhere, policymakers from the European Central Bank (ECB) and the Reserve Bank of New Zealand (RBNZ) also liked the Fed’s Average Inflation Targeting (AIT) method. Though, traders might have started reading between the lines from the Fed Chair’s comments concerning employment and inflation.
Against this backdrop, S&P 500 Futures refresh record top beyond 3,500 whereas the US 10-year Treasury yields add three basis points (bps) to the previous run-up past-0.70%.
Looking forward, market players will keep eyes on the Jackson Hole as some more of the central bankers are up for talking. Also important are the headlines concerning the pandemic and the US-China tension amid a light calendar.