Economy

Asia cautious as everything rides on dovish Powell

Asia cautious as everything rides on dovish Powell”

European stock markets were set to follow Asia and USA markets lower.

Observers said that while a big cut - of 50 basis points - has all but been dismissed, the Fed is expected to unveil at least a 25 point reduction at its next gathering this month.

Seoul rose 0.4 percent, while Wellington jumped 0.6 percent and Taipei gained 0.5 percent with Manila and Jakarta also up.

The jobs figures "have been a good reminder that the market may have gone well ahead of itself when it comes to the pricing of an eventual monetary easing in the United States", Ipek Ozkardeskaya, senior market analyst at London Capital Group, said in a note on Tuesday.

Meanwhile, markets weighed in the ongoing US-China trade talks and escalating Japan-South Korea trade tensions. Hong Kong's Hang Seng rose 0.5% to 28,248.14, while the Shanghai Composite inched up 0.1% at 2,931.18.

The benchmark S&P 500 lost 0.5 per cent to 2,976.

Apple's suppliers in Japan, such as Murata Manufacturing and Taiyo Yuden, fell 2.1% to 3.4%.

Still, money markets are pricing in a 95 per cent probability of a 25-basis-point rate cut at the central bank's July 31 meeting, according to FedWatch.

Every sentence Federal Reserve Chairman Jerome Powell speaks to Congress this week is sure to be parsed by investors who expect - and hope - the Fed will cut interest rates later this month for the first time in a decade.

More news: How Suits will deal with Meghan Markle's character in series' final season

Prior to the employment report, the Fed was expected to slash the interest rate target-currently at 2.25-2.5%-by as much as 50 points to counteract a slowing economy.

Overnight, Atlanta Fed bank president Raphael Bostic let nothing out of the bag by saying the central bank was debating the risks and benefits of letting the US economy run "a little hotter".

"The re-adjustment in expectations did push the dollar higher and had a negative effect on Asia but Europe has been supported by investors saying "whatever the Fed does, the ECB (European Central Bank) will still cut", said Andrew Milligan, head of global strategy at Aberdeen Standard Investments.

"After all, there is that small thing called "credibility issues", so why on Earth would the Fed want to lead markets down the primrose path?"

Against the dollar, the euro was little changed at $1.1204 after hitting $1.1194, which was the lowest in almost three weeks. Investors also think there is a higher chance the Fed will not cut rates at the September meeting.

The dollar changed hands at 108.78 yen, having risen in the previous session to its highest in more than a month.

The dollar index.DXY, which measures the greenback against a basket of six major currencies, rose 0.13%, while the euro dipped 0.1% to $1.1206 EUR=. USD/TRY was down 0.4% to 5.7127, but is still up over 1.5% from Friday.

Brent crude LCOc1 futures rose 59 cents to $64.75, while USA crude CLc1 gained 80 cents to $58.63 a barrel. U.S. West Texas Intermediate (WTI) crude futures shed 0.4% to $57.46.



Like this

loading...
loading...

Latest


10 July 2019
Former bowler backs Black Caps cautious approach to semi-final
For India , as usual, Jasprit Bumrah was economical with the ball and provided India with the early breakthrough. Once the spinners came on there was more turn than expected and New Zealand continued to find it hard to score.

10 July 2019
Xbox's July update lets you pick Game Pass titles to play later
Want to stay up-to-date with what your friends are doing on Xbox? Try saying, " Alexa, ask Xbox what are my friends playing? ". Xbox Game Pass is becoming a lot more useful, thanks to a brand new Xbox One update that is now rolling out to players.

10 July 2019
Maybe I’m super strong - Serena Williams baffled by Wimbledon fine
Williams, the 11-seed, dismantled Carla Suarez Navarro 6-2, 6-2 to move one step closer to her eighth Wimbledon crown at age 37. Williams' potential opponents in the final are No. 7 Simona Halep and No. 8 Elina Svitolina , who meet in the other semifinal.

10 July 2019
Jeremy Corbyn calls on new Tory leader to stage second Brexit referendum
In a major shift in policy Britain's main opposition Labour Party announced support Tuesday for a new referendum on a Brexit deal. Fifty-seven per cent said they would be hurt by plans for a 12-month work and residency limit on lower skilled immigrants.

10 July 2019
Affordable Care Act: US court to weigh its constitutionality
Republicans were unsuccessful at repealing and replacing the law in 2017 when they controlled both chambers and the White House. A federal appeals court panel grilled Democratic attorneys general on Tuesday about whether Obamacare violates the U.S.

10 July 2019
Data breach lands Marriott chain £99m fine
The hack likely took place in 2014 and targeted a Starwood database, two years before the company was acquired by Marriott. Marriott issued an update on the situation in a filing made today with the US Securities and Exchange Commission.

10 July 2019
Nicki Minaj Drops Out of Headlining Saudi Arabia Concert After Backlash
After careful consideration, Nicki Minaj heard everyone's concerns and made a decision to pull out from the upcoming concert. Over the past several months, the kingdom has seen performances by the Black Eyed Peas, Mariah Carey, Sean Paul and others.

10 July 2019
Sir David Attenborough stresses 'radical' change needed to combat climate change
Attenborough opened the session by recalling his most vivid memory of seeing climate change occur at the Great Barrier Reef. Attenborough took aim at the U.S. and Australia as countries where climate science denial was particularly strong.

10 July 2019
Kourtney Kardashian celebrates daughter Penelope's birthday in a unique way
You are the sunshine of our lives and I am so blessed to have you to love and watch you grow up! "It's just giving me anxiety". But then half of me is like, 'Live your life, have fun'".

10 July 2019
Sarah Paulson won’t be part of ‘American Horror Story: 1984’
While speaking to an Extra reporter at WonderCon, Evan was asked if he was "involved" in the new season. Sarah Paulson isn't the only familiar face that'll be absent in American Horror Story: 1984 .