Talking Points:

  • Asian stocks mostly gained as investors considered the latest set of US Federal Reserve policy minutes
  • Official worries about the durability of inflation were front and center
  • The US Dollar was moderately lower

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Asian stock markets got another boost Thursday thanks to the US Federal Reserve.

The minutes from its last policy meeting were released overnight for Asian investors, and they showed some rate setters worried that subdued inflation may be more entrenched than initially thought. While markets still think US interest rates will rise in December, the minutes cast some doubt on the likelihood of many more rises at least until inflation has clearly and sustainably been shown to be heading up.

Post-crisis markets tend to rise on prognoses of enduring US stimulus and Wall Street duly hit new record closing highs. The Nikkei 225, too, duly extended gains from its previous, 21-year peak. It rose 0.4%, with the ASX 200 up by a similar amount. Australia’s ASX 200 added a similar amount, with the Kospi up by 0.5%, although Shanghai stocks failed to hold on to their gains as the session wound down.

In currency markets the Australian Dollar got a boost from higher local inflation expectations, but an as-expected run of producer price data failed to lift the Japanese Yen. The US Dollar was modestly lower against its major rivals overall as investors mulled those minutes

Gold prices got a lift from that subdued greenback while crude oil prices slipped on Wednesday’s news of higher US stockpiles.

There’s plenty of economic life left in the session. The Bank of England will release its credit conditions survey and then investors will get data on Eurozone industrial production and Canadian house prices. From the US will come initial and continuing jobless-claim data along with another look at crude oil inventories. European Central Bank President Mario Draghi will participate in a panel discussion in Washington DC.

--- Written by David Cottle, DailyFX Research

Contact and follow David on Twitter:@DavidCottleFX