Asian stock markets, including those in Japan, Hong Kong, and South Korea, experienced a significant surge today, reflecting the upward trajectory of U.S equities and bonds. This surge follows the Federal Reserve's hint at ending its policy tightening cycle, a move that has been met with optimism from investors. Wall Street's S&P 500 and the tech-heavy Nasdaq 100 also saw impressive gains, marking the S&P's best weekly performance since March, while mainland Chinese stocks remained stable.
The Federal Reserve's unchanged interest rate stance influenced U.S crude oil prices to rise over 1% amid the Israel-Gaza conflict, driven by supply concerns and potential effects on global economy and oil demand. Concurrently, falling Treasury yields weakened the U.S dollar but strengthened the Japanese yen.
The Fed's stance on interest rates was announced by Jerome Powell, who highlighted a considerable tightening of financial conditions due to higher long-term bond yields. This reduced the opportunity cost of holding non-yielding assets like gold and positively impacted major alternative cryptocurrencies such as Bitcoin, Ethereum, and Ripple.
On Thursday, Asian equity futures had gained after a rally in US stocks and bonds as the Federal Reserve maintained interest rates. This fueled hopes for an end to rate hikes, causing the S&P 500 and Nasdaq 100 to rally by 1.1% and 1.8%, respectively. Japanese, Australian, and Hong Kong shares also rose during this period.
On Wednesday, Australian and New Zealand yields fell in line with Treasury yields after plans were announced to slow long-term debt sales increases. Despite hinting at potential future hikes, Powell noted tightening financial conditions due to higher bond yields.
Mixed US jobs data showed more job openings but fewer new roles than expected. The Bank of England is likely to hold rates as inflation concerns ease. Asian economic releases include South Korea's inflation data, Malaysia's monetary policy decision, and Singapore's PMI data. Corporate earnings are expected from Tata Motors (BO:TAMO) (NYSE:TTM) Ltd, Adani Enterprises Ltd, Eli Lilly & Co (NYSE:LLY), Novo Nordisk (NYSE:NVO), and Apple Inc (NASDAQ:AAPL). Among these, Qualcomm (NASDAQ:QCOM) Inc.'s positive forecast contrasted Airbnb (NASDAQ:ABNB) Inc.'s disappointing Q4 outlook. West Texas Intermediate's price rose slightly below $81 per barrel. US factory orders, China Caixin services PMI, and Canada employment report were also on the agenda.
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