Asian stocks joined a global rebound and oil extended gains, while bonds in the region tracked a selloff in US Treasuries as traders bolstered bets on the Federal Reserve raising interest rates this week.
Equities in the region followed gains in the US and Europe as investors pondered strong American retail sales data and a bounce back in the price of oil. The won led Asian currencies higher, while the Thai baht maintained gains before an rate review. Ten-year bonds from Australia to Japan slipped as Treasury notes held onto most of Tuesday’s 10 basis-point surge in yields.
“Uncertainty will continue until we get the news from the Fed,” James Lindsay, who helps manage the equivalent of about US$3 billion in assets at Nikko Asset Management NZ in Auckland, said by phone. “The market is finely balanced on whether the Fed will move or not. There’s been uncertainties about China and global growth but the US economy looks strong enough to be able to withstand an increase in rates.”
Odds of a move from the Fed on Thursday have ticked up, with the chance of a rate increase now at 32%, from 28% a week ago. While a second month of gains in US retail sales burnished sentiment toward the world’s largest economy, bets on a September hike have fallen from more than 50% last month, before China shook global markets with its currency devaluation. After regulators stabilised equities by ordering state funds to buy, Chinese stocks have resumed losses amid angst over the economy.
The MSCI Asia Pacific Index climbed 0.7% by 9:58 a.m. in Tokyo, headed for its steepest increase in a week as Japan’s Topix index rose the first day this week. Standard & Poor’s 500 Index futures were little changed following a 1.3% rebound in the US stock measure. The Korean won gained 0.6% after S&P raised the nation’s credit rating. The baht traded at 35.914 per dollar, while Australia’s currency snapped a seven-day climb. Ten-year Australian bond yields jumped 13 basis points to 2.81%.
The debate over whether the Fed will pull the trigger on the first US rate increase since 2006 on Thursday is entering its final days, with economists and the market split on what action policy makers will take. Some analysts are suggesting the Fed consider a 1/8%age point increase in the benchmark rate, as opposed to the more typical quarter-point hike. A smaller move would allow the Fed to respond to improvements in the economy, while minimizing disruption in markets already jittery from China’s currency move.
Thailand is projected to keep interest rates on hold in its policy review Wednesday, and Sri Lanka updates on gross domestic product. Malaysian markets are closed for a holiday.
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Equities in the region followed gains in the US and Europe as investors pondered strong American retail sales data and a bounce back in the price of oil. The won led Asian currencies higher, while the Thai baht maintained gains before an rate review. Ten-year bonds from Australia to Japan slipped as Treasury notes held onto most of Tuesday’s 10 basis-point surge in yields.
“Uncertainty will continue until we get the news from the Fed,” James Lindsay, who helps manage the equivalent of about US$3 billion in assets at Nikko Asset Management NZ in Auckland, said by phone. “The market is finely balanced on whether the Fed will move or not. There’s been uncertainties about China and global growth but the US economy looks strong enough to be able to withstand an increase in rates.”
Odds of a move from the Fed on Thursday have ticked up, with the chance of a rate increase now at 32%, from 28% a week ago. While a second month of gains in US retail sales burnished sentiment toward the world’s largest economy, bets on a September hike have fallen from more than 50% last month, before China shook global markets with its currency devaluation. After regulators stabilised equities by ordering state funds to buy, Chinese stocks have resumed losses amid angst over the economy.
The MSCI Asia Pacific Index climbed 0.7% by 9:58 a.m. in Tokyo, headed for its steepest increase in a week as Japan’s Topix index rose the first day this week. Standard & Poor’s 500 Index futures were little changed following a 1.3% rebound in the US stock measure. The Korean won gained 0.6% after S&P raised the nation’s credit rating. The baht traded at 35.914 per dollar, while Australia’s currency snapped a seven-day climb. Ten-year Australian bond yields jumped 13 basis points to 2.81%.
The debate over whether the Fed will pull the trigger on the first US rate increase since 2006 on Thursday is entering its final days, with economists and the market split on what action policy makers will take. Some analysts are suggesting the Fed consider a 1/8%age point increase in the benchmark rate, as opposed to the more typical quarter-point hike. A smaller move would allow the Fed to respond to improvements in the economy, while minimizing disruption in markets already jittery from China’s currency move.
Thailand is projected to keep interest rates on hold in its policy review Wednesday, and Sri Lanka updates on gross domestic product. Malaysian markets are closed for a holiday.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
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