Talking Points
- Most Asian markets ended a quiet Monday session in the green
- The ASX was an exception, weighed down by the energy and industrial sub-sectors, which returned some recent gains
- With the US out for holiday, action could be slight through the European session
Asian markets were generally higher on Monday, with investors reportedly looking towards the economic policies of US President Donald Trump and hoping for tax reform.
In Japan, the Nikkei 225 benchmark ended up just 0.1%, but had been much lower earlier in the session. The index was pressured by a moderately stronger US Dollar which in turn strengthened against the Yen after Japanese trade data missed expectations for January.
The greenback also got a modest fillip from Cleveland Federal Reserve President Loretta Mester. Speaking in Singapore she said the US economy was on a sound footing, and proclaimed herself relaxed about the prospect of gradually higher interest rates as long as it continues to be so. In truth there was little new here, but Mester’s comments left the prospect of higher rates this year very much on the table. That was good enough for Dollar bulls.
Australia’s ASX 200 index lost nearly 0.3%, with most sectors lower. However, South Korea’s Kospi managed gains as did stocks in both mainland China and Hong Kong. US markets will be closed for a public holiday but the general equity cheer was put down to renewed optimism that the Trump White House will have much to offer in terms of tax plans, infrastructure spending and deregulation.
On foreign-exchange markets the US Dollar was broadly but mildly stronger. Gold prices slipped back, however, battered anew by the prospect of higher US rates. Crude oil prices were broadly flat, stuck as they often are these days between hopes for production cuts and rising US inventories.
The rest of the session has little to offer investors and, with the US out, many may decide to hold off in any case. Consumer confidence data out of the Eurozone will be the probable highlight.
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--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter: @DavidCottleFX
