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Talking Points:

  • Asian stock markets mostly gained, with investors still looking hopefully at the White House
  • Hopes for a fiscally expansive US are underpinning stock markets and the Dollar
  • Markets in Hong Kong and Sydney missed the party

Asian stock markets were in the green on Tuesday, reportedly as optimism persists that US President Donald Trump’s economic policies will stoke growth.

The US Dollar was already getting some support from expectations that US interest rates won’t be long in rising. That strength helped the Nikkei gain 0.7%. Meanwhile South Korea’s Kospi hit peaks not seen for more than eighteen months on news of a sharp rise in exports for the first 20 days of February.

Hong Kong’s Hang Seng index was a rare exception to the rule. It slipped when investors heard that HSBC had taken a 62% pretax profit hit in 2016. This was thanks to slowing growth in its main markets - which include Hong Kong - and some one-time charges. Australia’s ASX 200 also slipped, but not by much. It was down 0.2%.

The greenback managed cross-board gains, with the Australian Dollar especially pressured by monetary-policy minutes from its own central bank. Policy makers at the Reserve Bank of Australia took the view that record-low interest rates could be with the country for a while yet.

It was a busy session for Japanese economic numbers which had a mixed tale to tell investors. The manufacturing sector was revealed to have been in extremely rude health in January, while department store sales were less weak than they had been. A look at all industry output was a lot gloomier but, as it covered December, did look a little historic.

Crude oil prices were mixed too, with Brent down a little as US benchmark prices gained. Saudi Arabia reportedly shipped less oil in December than it had the month before.

The rest of the session will offer investors Purchasing Managers Indexes from around Europe and the US, along with UK public sector borrowing figures for January. The President of the Federal Reserve Bank of Minneapolis, Neel Kashkari, is due to speak on the US economy.

Would you like to know more about trading the financial markets? The DailyFX trading guide is here to help.

--- Written by David Cottle, DailyFX Research

Contact and follow David on Twitter: @DavidCottleFX