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Asian Markets Bounce Back On US Earnings, Aussie Banks Gain

Asian Markets Bounce Back On US Earnings, Aussie Banks Gain

David Cottle, Analyst


Talking Points

  • Asian bourses ended in the green, some of the notably so
  • A weaker US Dollar kept the Nikkei in check
  • But financials lifted the ASX as less-onerous-than-expected capital requirements were cheered

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Asian stocks were mostly in the green Wednesday thanks to solid Stateside corporate earnings and better economic news out of China this week, which continues to lend support.

Wall Street’s lead had been mixed, but yet another record high for the Nasdaq kept the Asian bears at bay. The Nikkei 225 ended up just 0.1%, with the stronger Yen possibly preventing it from further gains. Australia’s ASX 200 ended up 0.9%- banks were in the lead there. New capital requirements were less oneros than so than some had feared. Chinese stocks ended well up, with a 1.5% gain for the Shanghai Composite. Better-than-expected local growth data released on Monday was reportedly still helping.

Wednesday’s Asian data schedule was thin. The Australian Leading Index from major lender Westpac topped the bill but it didn’t win many hearts, coming in under trend for the first time in nearly a year. Westpac’s economists think the country’s growth momentum is stalling and doubt that even the distant interest rate hikes forecast by futures markets will now happen.

The US Dollar clawed back some of the losses posted earlier this week when US Republican Senators failed to back their own party’s healthcare reforms, sowing investor doubts about the Donald Trump White House’s legislative power. But the greenback remained under pressure against Asia/Pacific currencies. It is still close to ten-month lows, at least against major traded rivals and notably weak against the Australian Dollar which is making 2017 highs.

Crude oil prices were lower again, by about 20 cents, as investors once more fretted about the high inventory levels which seem to continually plague this market. Gold prices were steady having hit their highest levels for the month on Tuesday.

The rest of the day’s economic data has a US flavour. Housing starts, mortgage applications and yet more oil inventory numbers are due for release.

--- Written by David Cottle, DailyFX Research

Contact and follow David on Twitter: @DavidCottleFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.