MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.8% in early trade, supported by a 0.6% gain in South Korean stocks, a 0.5% gain in Chinese companies, and a 0.9% jump in Hong Kong’s Hang Seng.
Japan’s Nikkei index jumped 1.3%.
S&P 500 futures rose 0.2%, while Nasdaq futures rose 0.3%, after modest gains in US stocks on Wednesday.
On Thursday, Core Bank slowed the pace of monetary tightening to a more modest 25 basis points, joining other central banks that have shied away from excessive hikes amid the impending global recession.
Minutes of the US Federal Reserve’s latest meeting also showed that a “significant majority” of Fed policy makers agreed that it “would soon be appropriate” to slow the pace of interest rate hikes.
“Overall, it is clear from the minutes that FOMC participants are determined to raise interest rates further in the face of a very tight labor market and unacceptable inflation,” Barclays analysts said.
“However, the minutes also reveal an emerging difference of views among members about the maximum rate, and uncertainty about that rate.”
The futures market indicates a 76% chance of a 50 basis point hike to 4.25%-4.5% at the December meeting, while the majority of investors expect the US Fed Funds target rate to be above 5% by next May.
US economic data on Wednesday showed that jobless claims rose more than expected last week, while business activity contracted for a fifth month in November.
In Japan, data on Thursday showed manufacturing activity contracted at the fastest pace in two years in November.
Meanwhile, in China, Covid cases have continued to rise, with the economic toll of movement restrictions and lockdowns compounding.
On Wednesday, China’s cabinet raised the possibility of an upcoming cut in the required reserve ratio for banks, promising new stimulus measures to revive its coronavirus-hit economy.
On Thursday, the US dollar failed to recoup last night’s losses by 1%, with the index settling at 105.89 against a basket of currencies. [FRX/]
In the oil market, prices are set to test a key support level dating back to September, which if breached could see oil drop to levels not seen until late 2021, adding to evidence that inflation is likely starting to ease.
US crude oil futures fell 0.2% to $77.79 a barrel, after falling more than 3% on Wednesday as the Group of Seven (G7) looked to cap the price of Russian oil above the current market level. [O/R]
Brent crude futures fell 0.15% to $85.26.
In the bond market, long-term US Treasury bonds rebounded overnight after the Fed’s meeting minutes. 10-year yields fell to a whopping 79 basis points shortfall compared to 2-year yields, a curve reversal on a scale not seen since the dot.com crash of 2000 and, at first glance, a sign that investors are expecting a deep dive. economic slowdown in the coming months.
US markets are closed on Thursday for the Thanksgiving holiday.