Asia Up On G-20 Hopes, Tech Leads In The EU, Jerome Powell Speech In Focus
Asia Moves Higher On Renewed G-20 Hopes
Asian markets moved higher in Wednesday trading as G-20 hopes are renewed. Comments from Larry Kudlow, trade adviser to the US President, that communication was occurring at all levels rekindled expectations the meeting between Chinese President Xi Jinping and Donald Trump would produce positive results for trade. Most indices were up about 1.0%, the Hong Kong-based Heng Seng Index led with a gain near 1.30%.
The Australian ASX was a notable laggard, closing with a loss of -0.6%. The commodity-sensitive index was hurt by weakness in the mining sector. Rio Tinto and BHP Billiton both fell, Rio Tinto more than -2.0%, on fears of slowing global growth and demand for industrial metals.
Tech Leads EU Markets Higher
In the EU easing outlook for trade driven by Larry Kudlow’s comments had tech moving higher. Shares of chipmaker AMS rose more than 5% and at midday was one of the most heavily traded stocks.
European indices were modestly higher at midday on hopes for the G-20 meeting. The French CAC led with a gain of 0.44%, the DAX was trading up about 0.20%, and the UK FTSE was hugging the flat-line. In France, equities were lifted by comments from President Emmanuel Macron. Macron says the country will increase its stake in publicly listed EDF, the countries largest electric utility.
The EUR/USD held steady in early trading as market participants wait on an important speech from FOMC Chairman Jerome Powell. Powell is making a speech before the NY Economic Club and is expected to detail the Fed’s framework for monitoring stability. His comments will be closely watched for signs of dovishness but there is little expectation he’ll comment on policy or changes of FOMC views at this venue.
US Futures Up Ahead Of Major Market Moving Events
US equity futures indicated a mildly higher open on Wednesday morning as markets gear up for a slate of potentially market-moving events. First up is the Jerome Powell speech scheduled for today but it is not the most important. More important is the PCE price index and FOMC minutes scheduled for Thursday.
The major indices were all indicated to open with gains above 0.50% led by the Dow Jones Industrials. The blue-chips were looking at a gain of 0.70% and had been edging higher in early pre-market trading . While inflation data is important, the outcome of the weekends meeting between Trump and Xi will have a more far-reaching effect. Traders should be wary of volatility and whiplash until then.
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