SYDNEY (Reuters) – Asian stock markets lagged Thursday as US stock index futures surged to new all-time highs after the Federal Reserve reiterated its commitment to maintaining ultra-weak policies even amid a rapid economic recovery.
The broadest MSCI Asia Pacific Equity Index outside Japan was unchanged and also remained largely unchanged over the week. The Japanese Nikkei was down 0.3% and the Chinese blue chips were down 0.1%, while trading was very weak.
Growth in the US economy helped S&P 500 futures add 0.3% to a new high, while Nasdaq futures added 0.4%. Futures on the EUROSTOXX 50 were up 0.2% and futures on the FTSE were up 0.3%.
The minutes of the last meeting of the Federal Reserve System showed that its members felt that the economy was still far from target and were in no rush to cut their monthly bond purchases by $ 120 billion.
Fed Chairman Jerome Powell speaks at an IMF event later Thursday and is likely to confirm the dove outlook.
“This discussion is consistent with our view that the Fed will only start talking about emission cuts this year, and that actual changes in the pace of purchases will not occur until the first quarter of 2022,” JPMorgan analysts said.
“Fed officials as a whole viewed the recent rise in long-term Treasury yields as a reflection of improved forecasts and a slight rise in inflation expectations, rather than a risk to the outlook.”
The 10-year Treasury yield has since slipped slightly to 1.667% from a recent 14-month high of 1.776%, but struggled to break below 1.59%.
The pullback coincided with a drop in the dollar index to 92.444 from a recent five-month high of 93.439. The dollar also held at 109.78 yen, falling from a recent annual peak of 110.96.
The euro remained stable at $ 1.1868 after hitting $ 1.1914 overnight after an unexpectedly upbeat review of business activity in the European Union.
“Improved virus outbreaks and growth expectations have spurred consumer and business confidence, driving both domestic and global demand for manufactured goods,” Barclays analysts said.
“This phenomenon is widespread throughout Europe.”
In the commodity markets, gold traded at $ 1,736 an ounce after meeting resistance around $ 1,745.
Oil prices fell, but were still in the tight trading range that they had for the past two weeks or so. [O/R]
Brent crude fell 38 cents to $ 62.78 a barrel, while US crude fell 40 cents to $ 59.36 a barrel.
(Additional reporting by Chibuike Ogu; edited by Ana Nicolasi da Costa)