© Reuters. MANAGEMENT PHOTO: Senate Bank Committee hearing on Capitol Hill, Washington
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By Stanley White and Elizabeth Dilts Marshall
TOKYO / NEW YORK (Reuters) – Asian stocks and futures in the US rose on Thursday after the Federal Reserve committed itself to maintaining accommodative monetary policy, and that US economic growth will be rapid this year as the COVID-19 crisis alleviated.
MSCI’s broadest index of Asia-Pacific equities outside Japan rose 0.87%, while equities in China rose 0.74%. The Australian market caught the trend and fell by 0.73%.
E-mini futures contracts rose 0.7%.
increased by 0.52%, German by 0.75% and futures by 0.4%, which rose at a bright start for European trade.
While inflation is expected to reach 2.4% this year, above the central bank’s target of 2%, Fed Chairman Jerome Powell calls it a temporary surge that will not change the Fed’s promise to stay overnight. to keep interest rates close to zero.
Long-term treasury yields continued to increase and the yield curve increased as investors in bonds decided to focus more on rising inflation expectations.
The yen wiped out losses and government bond yields rose briefly after a media report that the Bank of Japan would agree to trade yields in a broader band when it closes a two-day policy meeting on Friday.
“If the Fed is not going to tighten, it’s very positive for risky assets,” said Teresa Kong, head of fixed income and portfolio manager at Matthews Asia. “We should see a slight increase in Asian assets and currencies.”
Shares in South Korea and Singapore also jumped more than 1%, taking their lead from a strong session on Wall Street.
The S&P 500 closed at a record high on Wednesday, closing above 33,000 points for the first time, bolstered by the Fed’s strong economic forecast and Powell’s comments that it is too early to discuss declining measures.
The MSCI benchmark worldwide reached 0.35% to reach an all-time high.
The Fed predicted that the US economy would grow by 6.5% this year – the largest annual output growth since 1984 – thanks in part to massive federal fiscal stimulus and optimism surrounding the success of coronavirus vaccinations.
“It’s a little shocking … that the US government officially believes it will grow faster than the Chinese government believes it will grow this year,” said Christopher Smart, global chief strategist at Barings Investment Institute in Boston. it’s a ‘head’-turning moment for investors. ‘The yen wiped out losses and rose to 108.94 per dollar after the newspaper said the BOJ would be able to move 10-year bonds to 0.25% above or below zero, which is slightly wider than the current band of 0.2%.
Japan’s ten-year yield on government bonds rose briefly and futures fell, but the focus shifted to the outcome of the BOJ’s meeting on Friday.
The Australian dollar jumped to a two-week high of $ 0.7835 after data showed the country’s economy was creating more than twice as much jobs as expected in February.
U.S. treasury yields for ten years rose to 1.6639%, not far from the highest since January last year.
The spread between two years and ten years US yields, the most important part of the yield, is rising to 155 basis points, the strongest since September 2015.
The ten-year inflation breakthrough rate reached 2,309%, indicating that inflation expectations are the highest since January 2014.
Oil futures have extended declines, hurt by rising inventories and expectations of weaker demand in Europe, where the coronavirus vaccine is faltering.
fell 0.63% to $ 67.57 a barrel, and U.S. crude oil fell 0.57% to $ 64.23.
rose 0.35% to $ 1,750.83 per ounce at 0119 GMT, while the US rose 1.1% to $ 1,745.80 per ounce as the Fed’s promise to keep rates low and the concerns about inflation have pushed up the precious metal.