Wednesday 24th February 2021: Dovish Fed fails to shore up Asian stocks

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Global Markets:

Asian Stock Markets : Nikkei down 1.61%, Shanghai Composite down 1.99%, Hang Seng down 3.08%, ASX down 0.90%

Commodities : Gold at $1806.45 (+0.03%), Silver at $27.84 (+0.54%), Brent Oil at $64.30 (-0.28%), WTI Oil at $61.35 (-0.52%)

Rates : US 10-year yield at 1.354, UK 10-year yield at 0.722, Germany 10-year yield at -0.327

News & Data:

(USD) CB Consumer Confidence 91.3 vs 90.2 expected

(GBP) Claimant Count Change -20.0K vs 13.8K expected

IAEA report: Iran uranium program violates accord

Japan Cabinet OKs bill to ratify RCEP trade deal including China

Markets Update:

Asian stock markets are mixed on Wednesday following the lackluster cues overnight from Wall Street. There are also continuing concerns over an uptick in bond yields and worries over higher inflation affecting valuations. Asian stocks ended mixed on Tuesday. Investors are also looking to the meeting of Group of 20, or G20, finance ministers and central bankers, including U.S. Treasury Secretary Janet Yellen, due to take place virtually on Friday.

In Japan, the Nikkei 225 fell 1.6% while the Topix index declined 1.8%. South Korean shares also fell as the Kospi index dropped 2.5%. Chinese mainland shares also traded lower: The Shanghai composite dropped 2% while the Shenzhen component index fell 2.4%. Hong Kong’s Hang Seng Index tumbled 3.1% in late-afternoon trade

Ten-year Treasury yields held steady just below their one-year high reached on Monday. February’s rise in yields reflects not just higher inflation expectations but better growth forecasts too, and ten-year U.S. real yields are on course for their sharpest monthly rise in more than four years.

Upcoming Events:

02:30 PM GMT – (GBP) Monetary Policy Report Hearings

03:00 PM GMT – (USD) Fed Chair Powell Testifies

03:30 PM GMT – (USD) Crude Oil Inventories