Asian stocks and United States futures rally after Fed moves calm markets

Asian stocks and United States futures rally after Fed moves calm markets”

John Roberts, U.S. rates strategist at NatWest Markets, said it will now "presumably not be discernible which corporates certified for the program and which did not", removing a potential stigma.

Germany's DAX was up 2.4% at 12,268 after the ZEW index of investors' economic confidence rose for a third consecutive month, with financial professionals' assessment of the current economic situation in Germany improving for the first time since January. The FTSE 100 added 2.3% in London after data showed the United Kingdom unemployment rate remained unchanged at 3.9% in April even as other indicators suggested the labor market has weakened dramatically.

"In case the generosity of the Fed was in any doubt, it is not".

The Dow Jones Industrial Average .DJI rose 157.62 points, or 0.62%, to 25,763.16, the S&P 500 .SPX gained 25.28 points, or 0.83%, to 3,066.59 and the Nasdaq Composite .IXIC added 137.22 points, or 1.43%, to 9,726.02.

"No doubt the market liked it: Who doesn't like more cake and ice cream?" said Robert Pavlik, chief investment strategist, senior portfolio manager at SlateStone Wealth LLC in NY.

Meanwhile, new US figures are expected to show Tuesday that retail purchases climbed 9% from April to May, according to economists surveyed by the data provider FactSet. Japan's Nikkei closed up 4.9%, expanding earlier gains after the Bank of Japan kept interest rates unchanged, while saying that it would closely monitor the impact of Covid-19 and "will not hesitate to take additional easing measures if necessary".

South Korea's Kospi jumped 5.3% after recording its worst day since March on Monday. Hong Kong's Hang Seng added 2.4% to 24,344.09.

The central bank has deployed a $250 billion lending program to buy outstanding corporate bonds.

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Gov. Haruhiko Kuroda told reporters that recovery could come in the latter part of the year if the effects of the pandemic are mitigated.

But surging new cases of COVID-19 in China, where the pandemic originated, prompted the reintroduction of containment measures, and record hospitalizations in several USA states dampened investor risk appetite. Governments are relaxing lockdowns in hopes of nursing their devastated economies back to life, but without a vaccine, the reopenings could bring on further waves of COVID-19 deaths.

"More importantly and something that seems to get lost in every rebound narrative is whether consumer behaviour turns more cautious and inhibits a recovery in spending", said Innes of AxiCorp.

The overnight announcement by the USA central bank to infuse further liquidity overshadowed fears of a fresh wave of infections following the emergence of new cluster of COVID-19 cases in Beijing in recent days.

The Australian Bureau of Statistics reported payroll jobs rose 0.4 per cent in the final week of May, compared to the previous week, and were up 1 per cent for the whole month. Brent crude, the worldwide standard, added 14 cents to $39.86 a barrel.

The euro and yen were both barely budging at $1.1333 and 107.33 yen per dollar.

The euro was flat at $1.1316 EUR=EBS , recovering from falls a couple of days back after traders feared a second wave of coronavirus and chose to cash in on any gains.

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