Asian Stocks Storm Higher, Perky Caixin PMI Lifts Aussie Dollar

Talking Points:

• Most indexes posted decent gains with the reopened Nikkei surging ahead
• Chinese service sector data beat forecasts comfortably
• The US Dollar posted broad gains as rate-hikes remain on the table

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Asian stocks were mostly higher Thursday running with a stronger Wall Street lead. US indexes made gains on news of stronger manufacturing data and a set of Federal Reserve policy meeting minutes which looked tentatively toward at least some tax-cut related boost for growth.

The Nikkei 225 hit levels not seen since January 1992, rising nearly 3% as markets opened for their first day of trade after the holidays. Chinese markets held gains helped by a December Purchasing Managers Index survey which saw the private service sector turn in its strongest performance since August, 2014. South Korean stocks were notable losers. Investors remain concerned about North Korea’s belligerence, and there was some weakness in local automakers too.

The Chinese numbers also gave the Australian Dollar a boost in a session which broadly saw the US currency retrace some of its losses in response to stronger data Stateside. Gold prices struggled as the US Dollar firmed and as expectations for higher US interest rates held up. Crude oil prices remained near levels last reached in 2014 as markets tightened thanks to ongoing Iranian unrest and OPEC production cuts.

Still on Thursday’s slate are various PMIs from the US and around Europe. UK public borrowing figures are also due. From the US will come labour market surveys from Challenger and Automated Data Processing along with initial and continuing jobless-claim figures.

--- Written by David Cottle, DailyFX Research

Contact and follow David on Twitter: @DavidCottleFX