Talking Points
- Asian markets were lower on Thursday, focused on Wall St. for lack of other news
- The US Dollar failed to find support in Federal Reserve minutes which were objectively quite hawkish, but apparently a bit less so than markets had anticipated.
- Weakness in private capital spending hit the Australian Dollar
Most Asian markets were lower Thursday following a mixed finish on Wall St. the day before and minutes from the Federal Reserve’s last policy meeting which suggested that an interest rate hike could come “fairly soon.”
The S&P 500 slipped a little after this. The Dow made a ninth straight record close, but only inched up 0.2% to do so.
The Nikkei 225 fell 0.3% in the afternoon, but ralied into the close to finish down by a whisker. The Kospi fared better, pushing into the green as the session faded. Markets in Hong Kong and mainland China both lost ground while Sydney’s ASX 200 shed about 0.4%. It actually saw some fairly widespread sectoral gains, but they were too small to negate marked weakness in raw materials.
The US Dollar tended to weakness. Those Fed minutes failed to give it much of a boost, apparently “hawkish” on rates though they were. Markets had been increasingly convinced that higher rates could come as soon as March. While that is clearly still a possibility, the minutes have been taken to mean that a later move may be more likely. The Dollar weakened against both Yen and Euro, although the Australian Dollar was hit by shock news of markedly weaker private capital spending.
Crude oil prices traded higher through the session, with both the US and Brent benchmarks adding a little under 1%. The American Petroleum Institute said on Wednesday that US inventories slipped last week, when analysts had been looking for a rise.
The rest of the global day will offer more energy-price clues in the shape of natural gas storage levels from the US Energy Information Administration. On top of that investors can look forward to US weekly jobless claims numbers and the national house price index. Atlanta Fed President Dennis Lockhart is due to speak but it seems as if he will be taking a turn down memory lane. His subject will be his own ten-year tenure at the Fed.
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--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter: @DavidCottleFX
