HONG KONG: The upbeat tone that has characterised this week helped Asian markets to fresh gains on Friday, with Hong Kong on course for a sixth straight day of rises.
Investors globally have been riding a wave of optimism since last week when the head of the Federal Reserve indicated it will likely slow its pace of interest rate hikes, while there were also signs that China and the US could eventually reach a trade deal.
And the gains were not limited to equities, with oil rising about 20 percent from 17-month lows at the end of December, while high-yielding currencies were being supported by a new-found demand for riskier assets.
Friday’s rally followed another positive lead from Wall Street, where dealers brushed off disappointing retail figures as they focused on the prospect that borrowing costs will not rise as much as previously feared.
Fed minutes Wednesday showed policymakers are happy to hold off any more rate hikes as they assess the state of the economy, backing up dovish comments last week by its head Jerome Powell.
There was a slight wobble in New York after Powell on Thursday suggested the bank’s securities holdings should be “substantially smaller” — a sell-off by the Fed of such assets would lift interest rates.
But the general mood remained upbeat as a number of other top Fed officials indicated they were happy to see a break in hikes.
“Markets are ultimately waiting to see if the Fed’s new rhetoric related to stepping back, does it translate to action, and does the Fed actually pause at some point,” Morgan Stanley economist Dan Skelly told Bloomberg TV in New York.
“That’s really what we are waiting for to see a sustained move higher” in stocks, he said.
Dollar extends losses, Asia markets rally after Fed’s dovish tilt
HONG KONG: The dollar extended losses and Asian markets enjoyed another day of gains Thursday after the Federal Reserve indicated it could soon cut interest rates.
The softer slant from the US central bank provided more support to global investors, who were already in buoyant mood after Donald Trump flagged positive talks with China’s Xi Jinping and raised hopes of a trade deal between the economic giants.
After a much-anticipated meeting, Fed boss Jerome Powell said officials felt the case for a reduction had “strengthened”, citing the trade standoff with China and weak inflation, adding it would “act as appropriate” to support growth.
The bank also dropped the word “patient” in describing its assessment of economic data, fuelling speculation of a reduction as soon as July.
“The forward guidance from the Fed was no longer about being patient but being pragmatic,” said Kerry Craig, global market strategist at JP Morgan Asset Management. “As inflation is taking longer to return to target and trade uncertainty is weighing on the global outlook, the Fed is singing a dovish tune.”
He added that Powell “walked a fine line, highlighting a level of confidence in the US economy, even as growth is expected to slow and vulnerabilities from global politics increase”, which was enough not to cause concern to traders.
Analysts at NAB bank said “the change in the Fed’s bias has encouraged the market to increase its expectations that a new round of easing is just around the corner”.
The news hit the dollar, which fell across the board on foreign exchanges with the South African rand 1.6 percent higher, Canada’s dollar rising one percent, South Korea’s won up 0.5 percent and the Indonesian rupiah 0.3 percent stronger.
It was even down against the euro, which has come under pressure since the European Central Bank hinted Tuesday at its own rate cuts, and the Brexit-battered pound.
U.S. China trade tensions likely to disrupt global economy: Kenyan official
NAIROBI: The U.S.-initiated trade war against China is likely to disrupt the global trading system and economic growth, a Kenyan official said here Monday.
“The trade disputes between the world’s two biggest economies will affect Kenya negatively,” Raphael Tuju, Kenyan secretary general of the ruling Jubilee Party, said in an interview.
The United States has imposed a 25 percent tariff on 250 billion U.S. dollars’ worth of Chinese imports in May and has threatened to impose additional tariffs on another 300 billion dollars’ worth of Chinese imports.
In addition, the United States has blacklisted a number of Chinese technology companies from doing business in the North American country.
Tuju said that China’s white paper titled “China’s Position on the China-U.S. Economic and Trade Consultations” is an important piece on public diplomacy, which will guide the trade talks between the two countries.
Kenya supports multilateralism because it is the future and the global community should promote it as much as possible, he added.
The former foreign affairs minister revealed that the world is truly interdependent, hence it needs to promote more trade and less barriers.
“I think there is some middle ground that ought to be investigated and negotiated to seek a permanent solution,” he said.
Pakistan, WB sign $918 mln loan agreements to support revenue mobilization, higher education
ISLAMABAD: Pakistan and World Bank (WB) Tuesday signed three loan agreements worth US$ 918 million to help support revenue mobilization and higher education development in the country.
The agreements were signed by Secretary Economic Affairs Division, Noor Ahmed on behalf of federal government, WB Country Director and World Bank, Patchamuthu Illangovan while the representatives of Higher Education Commission (HEC) and Government of Khyber Pakhtunkhwa signed their respective Project Agreements.
Adviser to the Prime Minister on Finance, Revenue and Economic Affairs, Dr. Abdul Hafeez Shaikh, witnessed the signing ceremony.
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