Bullish markets in Asia, but Fed remains a problem






Central banks are the compass of the markets: even if Asia closes the week on a high, betting on the reopening of China, concerns about new interest rate hikes remain.

The asian stocks ignored concerns about rising interest rate and economic risks advance on Friday before the Lunar New Year holiday brings trading to a halt in many of the region’s markets next week.

The American dollar however, it remained close to its weakest level since May as investors worried about the risks of a global recession like the Federal Reserve insists on raising the cost of money.

The general feeling is that the most closely watched central banks at the moment, the Fed and the AECare determined to continue the fight against inflation with an aggressive monetary policy. caterpillar and some US officials have confirmed this.

And the markets show very cautious optimism.

Asia shows optimism, but the Fed is holding back

They all close higher asian handbagsshowing some resilience despite a sell-off in Wall Street during the night, withS&P 500 which lost 0.76%.

Hong Kong shares led gains and Japan reversed small early losses. THE US stock futures they rebounded after the Wall Street sell-off showed some signs of easing.

The raw material and Asian assets overcame some of the US bearish news this week as traders bet on the US economic recovery. China. JPMorgan Chase raised its estimate for the country’s oil demand growth and said it would reopen earlier and faster than the bank initially anticipated.

Meanwhile, concerns about further Fed tightening were heightened by robust US jobs data and aggressive new rhetoric from central bank officials. Weekly jobless claims were lower than expected, indicating a tight job market.

Boston Fed President Susan Collins said the central bank should probably raise i Taxi “just above” 5%, and then keep it there, while Vice President Lael Brainard said that despite the recent moderation in inflation, it still remains high and policy still needs to be tightened.

The market is betting that the benchmark rate will stay just below 5% in June, implying just over 50 basis points of further tightening.

Meanwhile, thedollar indexwhich measures the dollar against six currency pairs including the euro and yen, little changed at 102.10, hovering close to the 7.5-month low of 101.51 hit on Wednesday.

To highlight this too caterpillar he spoke yesterday, dampening any enthusiasm about the possibility of the central bank slowing down or changing the course of its monetary policy in the euro zone: inflation is too high, he reiterated.

Source: Money It

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