By Gina Lee
Investing.com – Asia Pacific stocks were mostly up on Wednesday morning, with U.S. shares seeing modest gains during the previous session over raised hopes for an end to the COVID-19 pandemic and economic recovery.
10-year U.S. Treasury yields also saw their highest levels since March over expectations of massive stimulus packages from President-elect Joe Biden. However, these levels were tightened to near flat a day after a Treasury auction was well-bid.
The incoming Biden administration, set to take office on Jan. 20, is expected to ramp up the distribution of COVID-19 vaccines in the country, which would allow large parts of the economy to reopen, Commonwealth Financial Network head of portfolio management Peter Essele told Reuters.
“The amount of pent-up demand is slowly being unwound and over the next year it is probably going to result in one the strongest growth in 20 years and markets are pricing that in … right now, it’s a race between cases and the vaccine and the vaccine will ultimately win out and the curve will flatten out,” he added.
Although progress on vaccine rollouts continued to raise hopes for an economic recovery, lingering concerns over the speculative excess and froth that has driven stocks to all-time highs despite COVID-19 remains.
Federal Reserve Bank of St. Louis President James Bullard and Boston Fed President Eric Rosengren pushed back on speculation that the Fed will begin to ease its asset-purchase program any time soon in separate comments.
“What I think investors are most focused on is the digesting of what is shifting fiscal policy … we’re beginning to lose the anchor on some long-term key benchmark interest rates,” DWS Group chief investment officer of the Americas David Bianco told Bloomberg.
Fed Chairman Jerome Powell is scheduled to take part in a webinar on Thursday. Meanwhile, European Central Bank President Christine Lagarde will speak at an online conference later in the day.
Japan’s Nikkei 225 rose 0.83% by 10:38 PM ET (3:38 AM GMT). The state of emergency declared for the Greater Tokyo area during the previous week is expected to be extended to seven additional prefectures, including Osaka, Kyoto, Hyogo, Fukuoka, Aichi, Gifu and Tochigi.
South Korea’s KOSPI gained 0.59%. In Australia, the ASX 200 inched up 0.04% and Hong Kong’s Hang Seng Index inched up 0.07%.
China’s Shanghai Composite inched down 0.08%, while the SZSE Component was up 0.27%.
Elsewhere in the U.S., the House of Representatives is moving a vote to impeach incumbent President Donald Trump. Facing his second impeachment, Trump has denied responsibility for the violence perpetrated on Capitol Hill during the previous week, and his vice President Mike Pence said in Tuesday’s letter to House of Representatives Speaker Nancy Pelosi that he is opposed to invoking the 25th Amendment to remove Trump from office.
On the data front, the U.S. will release December’s core Consumer Price Index later in the day. Data on December’s Producer Price Index (PPI), core retail sales and industrial production is scheduled to follow on Friday.