Asian Shares Up, However Muted by Trump Threats Over Newest U.S. Stimulus Measures

© Reuters.

By Gina Lee – Asia Pacific stocks were up on Wednesday morning, with gains muted after U.S. President Donald Trump said he is asking Congress to amend a COVID-19 bill passed by both the House of Representatives and the Senate on Monday.

Japan’s edged up 0.12% by 10:02 PM ET (3:02 AM GMT). The Bank of Japan released its October monetary policy meeting minutes earlier in the day, in which a member expressed concern that “deflation might take hold” if COVID-19 spreads again and pushes down economic activity, so this “possibly warranted attention” in guiding monetary policy.

South Korea’s rose 0.61%.

In Australia, the gained 0.54%. The cluster of COVID-19 cases in Sydney’s Northern Beaches area grew to 97, and authorities extended the current lockdown will be extended over the Christmas holidays to curb the spread of the virus in the city.

Decisions on the lockdown in terms of New Year’s Eve celebrations and upcoming sporting events will be made after Christmas, New South Wales state Premier Gladys Berejiklian said.

Hong Kong’s inched up 0.07%. China’s was up 0.45% and the rose 0.72%.

Trump said on Tuesday that he may not sign the COVID-19 bill, calling it an unsuitable “disgrace.” Although he stopped short of threatening to veto the legislation, he asked to be sent a “suitable bill or else the next administration will have to deliver a COVID-19 relief package.”

Although Trump’s threat could delay the deployment of stimulus checks to Americans who are struggling amid the pandemic, President-elect Joe Biden said his administration will put forward another COVID-19 relief package early next year. Biden warned that the “darkest days in the battle against COVID-19 are ahead of us.”

Some investors were surprised at the reaction to the news of the bill’s passage.

“It’s interesting to note the very muted response from investors globally to the U.S. stimulus package. It doesn’t seem to be the magic bullet investors once thought it was,” CMC Markets Chief Markets Strategist Michael McCarthy told Reuters.

Meanwhile, the new B.1.1.7 strain of the COVID-19 virus that was first recorded in the U.K. and the rollout of COVID- vaccines, continue to feature on investors’ radars.

The B.1.1.7 strain has already seen London and southeastern England put under Tier 4 lockdowns and caused travel chaos, with more than 40 countries shutting their borders to the U.K. The Philippines banned all U.K. flights from Dec. 24 earlier in the day. The U.K. government is also under pressure as it works towards reaching a post-Brexit trade deal with the European Union (EU). The EU has rejected U.K. Prime Minister Boris Johnson’s latest concessions on fishing rights.

A recent global stocks rally was already looking fragile after seeing a record high during the previous week, and the recent developments have added fresh jitters.

“This is yet another catalyst to inspire people to cash out,” DailyFX strategist Ilya Spivak told Bloomberg.

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