Talking Points
- Asian stocks ended Thursday mostly higher
- US President Donald Trump’s tax plans have raised many questions, fewer answers
- A small Japanese growth-forecast upgrade from the Bank of Japan steadied markets
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Asian stock markets were mostly firmer Thursday as global investors delved more deeply in to the tax plans unveiled earlier by the administration of US President Donald Trump.
Even though proposed shifts include a huge cut in corporate taxes, investors are reportedly worried that these plans will swell the already vast US budget deficit, and stocks started the session lower.
However, the Bank of Japan upgraded its growth forecast for the world’s third-largest economy at the end of a monetary policy meeting which saw all settings unchanged, as expected. That seems to have steadied markets although the Nikkei ended a little lower. It was down 0.2% at the close, with other regional indexes modestly higher
In currency markets the US Dollar held up against the Yen, which was largely unmoved by the BoJ. The Canadian Dollar and the Mexican peso came roaring back however, having slumped earlier on reports that the US was considering withdrawal from the North American Free Trade Agreement (NAFTA). Both bounced when the White House said that the pact would not be scrapped but rather renegotiated.
Gold prices edged lower, but not by much, with spot off about 0.2% as the Asian session wound down, at $1,265/ounce. Crude oil prices were about 20 cents a barrel lower for both Brent and US benchmark blend, with markets reportedly back to fretting general oversupply of oil.
There’s plenty of life left in the global economic session. The European Central Bank will announce monetary policy, but it not expected to move the dials. We’ll also get a look at German consumer prices and then durable goods orders and the March trade balance out of the US. US initial jobless claims data is also coming, along with news of pending home sales.
Reserve Bank of Australia Governor Philip Lowe is also due to speak.
--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter: @DavidCottleFX
