By Ankur Banerjee
SINGAPORE, Feb 8 (Reuters) - Asian equities rose, while
the dollar wobbled on Wednesday after less hawkish than feared
comments from Federal Reserve Chair Jerome Powell boosted risk
appetite and investor hopes that the central bank may soon ease
monetary policy.
Investors will also watch the State of the Union speech from
U.S. President Joe Biden, in which he will declare U.S democracy
is bruised but "unbowed and unbroken" and cite progress in a
post-pandemic economy after massive infrastructure and inflation
bills passed in 2022.
In an eagerly awaited speech earlier on Tuesday, the Fed's
Powell reiterated that disinflation has begun but warned that
Friday's eye-popping jobs report showed why the battle against
inflation will "take quite a bit of time."
Those jobs figures showed a surprising addition of 517,000
new jobs in January, stoking fears that the tight labour market
may compel the Fed to remain hawkish.
"It didn’t take much for markets to re-find their mojo after
last Friday’s payrolls shock, just a speech from Fed Chair
Powell, at which he was not materially more hawkish than he was
after the recent FOMC decision," said Rob Carnell, ING's
regional head of research, Asia-Pacific.
Last week, the Fed raised interest rates by 25 basis points
and said it had turned a key corner in the fight against high
inflation but projected "ongoing increases" in borrowing costs
would be needed.
Powell's comments on Tuesday that the economy would need
more interest rate rises to keep inflation on a consistent
downward track was not really a deviation from what had already
been said, Carnell noted. "And equity markets saw that as an
excuse to rally."
MSCI's broadest index of Asia-Pacific shares outside Japan was 0.51% higher, while Japan's Nikkei lost 0.69%. Australia's S&P/ASX 200 index rose 0.31%.
China's shares was set to open 0.1% higher, while
Hong Kong's Hang Seng Index was 0.22% higher.
Asian shares tracked Wall Street, which ended higher in
choppy trading as investors digested Powell's speech. In his State of the Union address, Biden is expected to
hammer corporations for profiteering from the pandemic, and run
through a wish list of economic proposals, the White House said,
although many are unlikely to be passed by Congress. They
include a minimum tax for billionaires, and a quadrupling of the
tax on corporate stock buybacks.
In the currency market, the dollar pulled back a bit after
the speech. The dollar index , which measures the U.S.
currency against six major rivals, was at 103.30, having dropped
to as low as 102.99 in the previous session.
The Japanese yen was flat at 131.08 per dollar,
after surging 1.2% in the previous session.
The kiwi was 0.02% higher to $0.63265, while the
Aussie gained 0.11% to $0.69675, after surging more
than 1% on Tuesday.
Oil prices rose early on Wednesday, extending gains from the
previous two days, with Brent crude futures up by 11
cents, or 0.1%, to $83.80 a barrel, adding to a 3.3% gain in the
previous session.
U.S. West Texas Intermediate (WTI) crude futures
advanced by 13 cents, or 0.2%, to $77.27 a barrel, after jumping
4.1% in the previous session. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
World FX rates YTD Global asset performance Asian stock markets ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Editing by Sam Holmes)
Twitter: @AnkurBanerjee17;))
