By Wayne Cole
SYDNEY, Apr 8 (Reuters) – Asian stock markets lagged on Thursday, as US stock futures hit new highs after the Federal Reserve underscored its commitment to maintaining a super-flexible strategy, even as the economy enjoyed a rapid Recovery.
The MSCI index of Asia Pacific equities excluding Japan rose 0.2% in a session with limited volume. The moves were modest across the region, with Chinese stocks rising 0.1% and South Korea unchanged.
Japan’s Nikkei was down 0.3%, unhelpful by news that the Tokyo governor had called for emergency measures to curb a surge in COVID-19 infections.
The outperformance of the US economy contributed to S&P 500 futures rising 0.4% to a new high, while Nasdaq futures gained 0.7%. Futures for the EUROSTOXX 50 were up 0.4% and those for the FTSE 0.3%.
The minutes of the last monetary policy meeting of the Federal Reserve showed that its members consider that the economy is still far from its target and are not in a hurry to reduce their purchase of bonds worth 120,000 million dollars a month.
Fed Chairman Jerome Powell will speak at an IMF event on Thursday and is likely to reiterate the favorable outlook for monetary easing.
“This debate coincides with our view that the Fed will not start talking about withdrawing stimulus until the end of this year, and that real changes in the pace of purchases will not occur until the first quarter of 2022,” said analysts at JPMorgan.
“Fed leaders generally viewed the recent rise in longer-term Treasury yields as a response to an improved outlook and some strengthening of inflation expectations, rather than a risk to the outlook. . “
Yields on 10-year Treasuries have since fallen somewhat, to 1.669%, from a recent 14-month high of 1.776%, but have struggled to fall below 1.59%.
This pullback coincided with a drop in the dollar index to 92,382, from its recent five-month high at 93,439. The dollar was also holding at 109.70 yen, having lost its one-year high of 110.96.
The euro was stable at $ 1.1874, having peaked at $ 1.1914 overnight after a surprisingly upbeat survey of business activity in the European Union.
“The improvement in the virus and in growth expectations has boosted consumer and business confidence, boosting national and global demand for manufactured goods,” Barclays analysts say in a note.
“This phenomenon is widespread in all European economies.”
In commodity markets, gold remained stagnant at $ 1,738 an ounce after encountering resistance around $ 1,745.
Oil prices were down but were still within a narrow trade band that has held for the last two weeks or so. [O/R]
Brent fell 33 cents to $ 62.83 a barrel, while US crude lost 37 cents to $ 59.40 a barrel.
(Additional information from Chibuike Oguh; edited by Ana Nicolaci da Costa and Jacqueline Wong, translated by Tomás Cobos)