Asia shares touch 11-week high, dollar down
The U.S. dollar losses on Thursday after President-elect Donald Trump’s news briefing regarding future fiscal policies, disappointing bulls wagering on major stimulus.
Yet neither did Trump mention possible tariffs against Chinese exports, a relief for Asian share markets that have feared the outbreak of a global trade war.
It was enough to help MSCI’s broadest index of Asia-Pacific shares outside Japan climb 0.6 percent to its highest since late October, wile Shanghai stocks edged up 0.2 percent. Japan’s Nikkei slipped 0.9 percent as the yen climbed on a retreating dollar.
Wall Street had overcome its brief wobble to end on Wednesday firmer. The Dow added 0.5 percent while the S&P 500 gained 0.28 percent and the Nasdaq 0.21 percent. Health stocks were not so lucky after Trump said pharmaceutical companies were getting away with murder by charging high prices.
The S&P 500 healthcare index lost 1 percent while the Nasdaq biotechnology index sank 2.96 percent.
President-elect Trump’s first news conference since late July has left a veritable laundry list of questions unanswered for markets, wrote analysts at Westpac.
They said that the news conference was a far cry from the market friendly, pro-growth “presidential” comments that Trump delivered at his acceptance speech on 9 Nov. The issue is that markets arguably priced in too much reflation without any solid policy detail.
The uncertainty about what policies will actually be pursued has seen yields on 10-year Treasury notes rally from a 2.64 percent peak over the last month to stand at 2.334 percent on Thursday.
The U.S. dollar has to surrender some of its gains in the last week or so. Wednesday’s session was especially volatile with the dollar rallying hard into the Trump event, only to recoil at his vagueness on policy.
The dollar index dipped 0.3 percent to 101.520 on Thursday, having been as high as 102.950 at one stage overnight. The euro had rallied to $1.0602 from a trough of $1.0454, while the dollar lapsed to 114.76 yen from a top of 116.87.
Sterling also bounced from a 10-week low of $1.2048 to reach $1.2203. In commodity markets, oil was a shade softer after data showed rising U.S. crude inventories.
U.S. crude was trading 11 cents lower at $52.14, though that followed gains of nearly 3 percent overnight. Brent crude was off 4 cents at $55.06 a barrel.
Source : Reuters