Most Asian Stocks Lower As US Tax Disappoinment Weighs
- Asian stocks endured a lackluster Friday
- The Australian and New Zealand Dollars lurched lower on central bank and political commentary
- China held out the tantalizing prospect of more liberal foreign ownership rules- but in three years.
See what the foreign exchange trading community makes of the currencies you like, and those you don’t, with the DailyFX Sentiment Page.
Many Asian markets were pressured Friday following a shakier US lead after Senate Republicans detailed their tax plans on Thursday.
Corporate tax rates may not now fall until 2019 and this was rather later than many investors had hoped.
The Nikkei 225 slipped 0.8%, extending losses made on Thursday. The Kospi shed 0.3%, with the blue chips fading despite some strength for manufacturers. Australia’s ASX also fell but Chinese stocks did better, both in Hong Kong and on the mainland. Newswires reported Chinese Vice Finance Minister Zhu Guangyao as saying that foreign-ownership laws would be significantly relaxed with regard to local banks, insurance companies and asset managers, while the ceiling for foreign involvement in joint ventures would be raised. There is clearly seismic potential here, but Zhu also reportedly said that none of these things would happen for three years.
US tax-plan disappointments also weighed a little on the US Dollar. Its Australian and New Zealand counterparts were hit initially by news flow too.The Reserve Bank of Australia published a regular Monetary Policy Statement in which it once again worried about currency strength, while New Zealand’s new Finance Minister Grant Robertson suggested that some sort of employment mandate for the Reserve Bank of that country could be discussed soon which might mean looser monetary policy. He was clear that the current, inflation-fighting mandate would endure too though.
Still to come Thursday there's official UK manufacturing and trade balance data and the University of Michigan’s venerable snapshot of US consumer confidence.
--- 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.