Written by Jamie McGeever
(Reuters) – Future outlook for the Asian market.
Wall Street rises on Tuesday on tech-related bombast, which should give Asian markets a good base for Wednesday's rally, but upside as U.S. bond yields soar on better-than-expected U.S. inflation data may be limited. .
There is nothing on the local economic and policy calendar that could significantly move Asian markets on Wednesday, with announcements expected on New Zealand food prices, Indian trade and Indonesian consumer confidence. It's just statistics.
Investor sentiment across Asia appears to remain positive. On Tuesday, the MSCI Asia ex-Japan index rose nearly 1% to a seven-month high, Chinese stocks hit a nearly four-month high, and Japan's correction has hit a lull for now. There is.
All of this was before the Wall Street backlash. The S&P 500 rose to a new record close, and the Nasdaq rose 1.5%. Buoyed by his 7% rebound in market darling Nvidia and 12% rise in Oracle.
The 10-year Treasury yield posted its biggest jump in three weeks, despite a solid rise in U.S. Treasury yields after consumer inflation data for February was slightly higher than expected.
It may be too early to read too much into this, as U.S. stocks don't often rise on the day Treasuries sell. However, the bullish view is that it highlights the confidence underpinning the market, the resilience of technology and AI, and the upside potential that continues.
The question for Asian markets is whether these tailwinds will offset the headwinds of rising bond yields and a stronger dollar.
Chinese markets rose on Tuesday on improving domestic sentiment after China Vanke, the country's second-largest real estate developer, said the impact of Moody's downgrade on its financial activities was “controllable” .
Successfully addressing the real estate sector crisis is key to restoring broader economic growth, combating deflation and reversing the torrent of capital flight. It's a tall order, but the 13% recovery in Chinese stocks over the past month suggests some optimism.
Meanwhile, Bank of Japan Governor Kazuo Ueda on Tuesday dampened some of the soaring optimism about Japan's economy, telling lawmakers that while the economy is recovering, it is showing some signs of weakness.
The rather gloomy remarks came ahead of next week's Bank of Japan policy meeting, which will discuss whether the outlook is bright enough to phase out massive monetary stimulus.
Ueda's comments pushed Japan's two-year bond yield back from a 13-year high, while the yen suffered its biggest drop in a month.
Here are the key developments that could give further direction to the market on Wednesday:
– New Zealand food prices (February)
– India Trade (February)
– Indonesian consumer confidence (February)
(Written by Jamie McGeever)
