Asian stocks stall while the S&P futures hit a new high

© Reuters. Individuals wearing protective masks following the coronavirus disease (COVID-19) outbreak appear on a screen showing stock prices outside of a broker in Tokyo

Posted by Wayne Cole

SYDNEY (Reuters) – Asian equity markets lagged Thursday as U.S. stock futures surged to another record high after the Federal Reserve underscored its commitment to loose policy, despite a rapid recovery in the economy.

MSCI’s broadest index for stocks in the Asia-Pacific region outside of Japan was flat and changed little over the week. down 0.3% and the Chinese blue chips down 0.1%, with trading being very subdued.

The outperformance of the US economy helped hit a new high of 0.3%, while the Nasdaq futures rose 0.4%. EUROSTOXX 50 futures strengthened by 0.2% and futures by 0.3%.

Minutes from the Federal Reserve’s most recent political meeting showed that members felt the economy was still well below target and they were in no rush to scale back their $ 120 billion monthly bond purchases.

Fed chairman Jerome Powell, speaking at an IMF event later Thursday, is likely to reiterate the dovish outlook.

“This discussion is in line with our view that it will be later this year before the Fed talks about a rejuvenation, with real changes in buying pace not coming into effect until the first quarter of 2022,” said JPMorgan (NYSE 🙂 analysts. .

“Fed officials generally viewed the recent surge in longer-term government bond yields as an expression of an improving outlook and some stabilization in inflation expectations rather than a risk to the outlook.”

10-year government bond yields have since fallen slightly to 1.667% after hitting 1.776% in the last 14 months, but struggled to break below 1.59%.

The retreat coincided with a decline to 92.444 from its recent five-month high of 93.439. The dollar also held at 109.78 yen after falling from its recent year high of 110.96.

The euro remained stable at $ 1.1868 after hitting as high as $ 1.1914 overnight in a surprisingly positive survey on European Union business.

“Improved virus and growth expectations have increased consumer and business confidence and increased both domestic and global demand for manufactured products,” said analysts at Barclays (LON 🙂 in a note.

“This phenomenon is broad in all European economies.”

In the commodities markets, gold was idle at $ 1,736 an ounce after encountering resistance around $ 1,745.

Oil prices fell but were still in a tight trading range that had been held for the past two weeks or so. [O/R]

fell 38 cents to $ 62.78 a barrel, while lost 40 cents to $ 59.36 a barrel.

(Additional reporting by Chibuike Oguh; editing by Ana Nicolaci da Costa)

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