Talking Points
- Asian markets managed to gain, if not often by much
- Nervous eyes were cast at Europe where the UK will formally begin the process of leaving the EU
- The US Dollar gained on renewed US interest-rate hike hopes.
Most Asian markets were higher Wednesday, although there has been some late-session trepidation as the day will see the United Kingdom’s formal application to leave the European Union. Prime Minister Theresa May has already signed the document in question which will be delivered to Brussels later.
Away from Brexit, Wall Street was driving. The Dow Jones Industrial Average snapped a long, eight-day losing streak on Tuesday which saw Asian bourses start the day in better mood. The Dollar also bounced back from Tuesday’s lows, although against the basket of major rivals which compose the Dollar Index it remains lower than it was last week. Federal Reserve Vice Chair Stanley Fisher said in a televised interview that two more US interest rate hikes this year seemed “about right” to him, steadying markets which had begun to doubt this thesis, despite its remaining the Fed’s central projection.
Australia’s ASX benchmark added 0.9%, helped by gains for both energy and financials as the greenback showed signs of life. The Nikkei was initially stymied by poor retail data, but managed to close up, if only barely (0.08%).
The Asian data calendar was a bit sparse and concentrated on Japan. Apart from the retail number, investors learned that small business was more upbeat in March. Much of the Nikkei trades ex-dividend as of Wednesday. Sales in mainland China and Hong Kong also edged up, as did Seoul’s Kospi.
Crude oil prices also continued to gain, tacking on about 0.4%, reportedly on Tuesday’s news that Libyan supply had been cut by a third thanks to the actions of armed groups in the country. Gold prices slipped from one-month highs, as US interest-rate prospects were held to have revived, and as the US Dollar strengthened.
Apart from probably endless Brexit headlines, the day will bring investors UK lending data and US crude oil inventory numbers.
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--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter: @DavidCottleFX
