Asian Markets React to Powell’s Dovish Remarks with Mixed Results

Asian markets reacted mixed to Powell’s dovish remarks, and US indices closed at record highs. Key economic data are awaited.

Global Market Overview:

Asian Stock Markets:

• Nikkei: +0.22%
• Shanghai Composite: -0.09%
• Hang Seng: -1.58%
• ASX 200: -0.19%

Commodities:

• Gold: $2433.5 (+0.37%)
• Silver: $31.02 (+0.34%)
• Brent Oil: $84.33 (-0.47%)
• WTI Oil: $80.31 (-0.47%)

Bond Yields:

• US 10-year: 4.199%
• UK 10-year: 4.151%
• Germany 10-year: 2.466%

Key News & Economic Data:

• CAD: Manufacturing Sales m/m 0.4% (vs. 0.3% expected)
• CAD: Wholesale Sales m/m -0.8% (vs. 2.0% expected)
• USD: Empire State Manufacturing Index -6.6 (vs. -5.5 expected)

Asian Markets React to Powell’s Dovish Remarks with Mixed Results

Market Analysis:

Asian markets showed a mixed reaction on Tuesday following Federal Reserve Chair Jerome Powell’s dovish comments, which bolstered Wall Street in the previous session. Powell suggested the Fed could act preemptively on interest rates, even before inflation reaches 2%, citing the delayed impact of monetary policies.

In Hong Kong, the Hang Seng index fell sharply by 1.57%, driven by declines in consumer stocks. However, Mainland China’s CSI 300 managed a modest gain of 0.21%. Shares of Ping An Insurance dropped over 5% after the company announced a significant cancellation of A shares worth $102.6 million.

India’s Nifty 50 reached a new high, rising 0.23% ahead of the union budget presentation. Meanwhile, Japan’s Nikkei 225 and Topix indices advanced by 0.24% and 0.48%, respectively, with TDK Corporation leading gains with a surge of over 4%.

South Korea’s Kospi increased by 0.14%, contrasting with a 1.33% decline in the Kosdaq index. Australia’s S&P/ASX 200 retreated marginally from its record close on Monday.

Economic Outlook:

Following weaker-than-expected GDP growth in China, Goldman Sachs and JPMorgan have revised their full-year GDP forecasts, highlighting concerns over the need for increased policy support from the Chinese government. Goldman Sachs predicts a GDP growth rate of 4.9%, down from 5%, while JPMorgan adjusted its forecast to 4.7% from 5.2%.

In corporate news, Singapore’s state investor Temasek unveiled plans to invest up to $10 billion in India’s financial services and healthcare sectors over the next three years. Despite having significant investments in China, Temasek remains cautious amidst ongoing trade tensions.

US Market Recap:

Overnight in the US, significant indices closed at record highs, buoyed by Powell’s remarks and optimism surrounding potential Republican gains following the attempted assassination of presidential candidate Donald Trump. The Dow Jones Industrial Average climbed 0.53% to close at 40,211.72, the S&P 500 rose 0.28% to 5,631.22, and the Nasdaq Composite gained 0.4% to reach 18,472.57.

Upcoming Events:

• 12:30 PM GMT – CAD CPI m/m
• 12:30 PM GMT – CAD Median CPI y/y
• 12:30 PM GMT – CAD Trimmed CPI y/y
• 12:30 PM GMT – CAD Common CPI y/y
• 12:30 PM GMT – CAD Core CPI m/m
• 12:30 PM GMT – USD Core Retail Sales m/m
• 12:30 PM GMT – USD Retail Sales m/m

The markets await these key economic indicators for further insights into the economic health of major economies.

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