Cyber Monday Deal: Up to 60% off InvestingProCLAIM SALE

GLOBAL MARKETS-Asia stocks pause at peaks, sustained by stimulus promise

Published 11/02/2021, 01:15 pm
Updated 11/02/2021, 01:18 pm
© Reuters.
EUR/USD
-
USD/JPY
-
XAU/USD
-
US500
-
AXJO
-
JP225
-
DX
-
GC
-
LCO
-
ESZ24
-
CL
-
NQZ24
-
PL
-
US10YT=X
-
MIAPJ0000PUS
-

* Asian stock markets : https://tmsnrt.rs/2zpUAr4

* Markets mostly flat amid multiple holidays

* Asia shares ex-Japan already up 10% this year

* Treasuries rally on surprisingly soft CPI, dovish Powell

* Oil eases after longest winning streak in two years

By Wayne Cole and David Henry

SYDNEY, Feb 11 (Reuters) - Asian shares rested at record highs on Thursday as investors digested recent meaty gains, though the promise of endless free money to sustain buying was reaffirmed by benign U.S. inflation data and a very dovish outlook from the Federal Reserve.

Adding to the torpor was a lack of liquidity as markets in China, Japan, South Korea and Taiwan were all on holiday.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS eased 0.1%, having climbed for four sessions straight to be up over 10% so far this year.

Japan's Nikkei .N225 was shut after ending at a 30-year peak on Wednesday, while Australia's main index .AXJO held near an 11-month top.

Futures for the S&P 500 ESc1 and NASDAQ NQc1 both dipped 0.1%, having again hit historic highs on Wednesday.

Still, the outlook for more global stimulus got a major boost overnight from a surprisingly soft reading on core U.S. inflation, which eased to 1.4% in January. Reserve Chair Jerome Powell said he wanted to see inflation at 2% or more before even thinking of tapering the bank's super-easy policies. Powell emphasised that once pandemic effects were stripped out, unemployment was nearer 10% than the reported 6.3% and thus a long way from full employment.

As a result, Powell called for a "society-wide commitment" to reducing unemployment, which analysts saw as strong support for President Joe Biden $1.9 trillion stimulus package.

Indeed, Westpac economist Elliot Clarke estimated over $5 trillion in cumulative stimulus, worth 23% of GDP, would be required to repair the damage done by the pandemic.

"Historical experience provides strong justification to only act against undesired inflationary pressures once they have been seen, after full employment has been achieved, he said.

"To that end, financial conditions are expected to remain highly supportive of the U.S. economy and global financial markets in 2021, and likely through 2022."

The mix of endless Fed support and a tame inflation report was a salve for bond market pains and 10-year yields eased to 1.12% US10YT=RR , from a 1.20% high early in the week.

That in turn weighed on the U.S. dollar, which slipped to 90.451 =USD on a basket of currencies and away from a 10-week top of 91.600 late last week.

The dollar eased to 104.57 yen JPY= , from a recent peak 105.76, while the euro rallied to $1.2117 EUR= from its low of $1.1950.

In commodity markets, gold was sidelined at $1,839 an ounce XAU= as investors drove platinum XPT= to a six-year peak on bets of more demand from the automobile sector. GOL/

Oil prices took a breather, having enjoyed the longest winning streak in two years amid producer supply cuts and hopes vaccine rollouts will drive a recovery in demand. O/R

"The current price levels are healthier than the actual market and entirely reliant on supply cuts, as demand still needs to recover," cautioned Bjornar Tonhaugen of Rystad Energy.

Brent crude LCOc1 futures eased back 50 cents to $60.97, while U.S. crude CLc1 dipped 48 cents to $58.20 a barrel.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Asia stock markets

https://tmsnrt.rs/2zpUAr4 Asia-Pacific valuations

https://tmsnrt.rs/2Dr2BQA

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Lincoln Feast.)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.