Author: Chibuike Oguh
(Reuters) – Asian stocks are poised to follow Wall Street’s cautious gains on Thursday after minutes from the last Federal Reserve meeting reaffirmed a commitment to keep interest rates low until the US economy becomes more robust.
The S&P 500 and Dow closed slightly higher on Wednesday, as Fed commentary reinforced investor expectations that the central bank plans to maintain its political support despite huge fiscal spending from a recent government stimulus package.
“Investors continue to focus on interest rates,” said Jeff Buchbinder, equity strategist for LPL Financial in Boston. “We in the market did not expect any signals of a policy change, and this is what we got.”
Australian S & P / ASX 200 futures gained 0.52% in early trading, while Japanese Nikkei 225 futures gained 0.03%.
Representatives of the US Federal Reserve System expressed caution about the persisting risks of a pandemic and reaffirmed their commitment to supporting the economy, given that “the way forward remains highly uncertain,” the minutes of the March 16-17 meeting said.
The yield on benchmark 10-year US Treasuries surged late in the session but still remained below the 14-month high of 1.776% reached on March 30. The recent decline in profitability boosted company growth and boosted technology and communications services stocks. as the sectors with the best performance of the day.
“The 10-year yields have not changed much today and the rate seems to be stabilizing in a lower range, which does match the best performance of emerging stocks, especially tech stocks,” Buchbinder said.
On Wall Street, the Dow Jones Industrial Average rose 0.05% to 33,446.26, the S&P 500 added 0.15% to 4,079.95, and the Nasdaq Composite fell 0.07% to 13,688.84.
Following the publication of the Fed’s minutes, 10-year bonds fell 4/32 to 1.6686%, down from 1.656% late Tuesday.
“We’ve already seen long-term 10-year rates jump, and when the Fed informed us that they are not going to move so that interest rates can remain at their lowest levels, perhaps until 2022 when they take effect,” said Jeff Carbone. , Managing Partner of Cornerstone Wealth Group in Charlotte.
The US dollar rose against a basket of world currencies after fluctuating for most of the session following the release of the Fed minutes.
The dollar index rose 0.148%, while the euro fell 0.02% to $ 1.1868. The Japanese yen was flat against the dollar at 109.85 per dollar, while the Korean won gained 0.03% against the US dollar at $ 1,118.71 per dollar.
Gold prices fell as economic optimism distracted investors from the safe-haven metal in favor of riskier assets.
Spot gold fell 0.4% to $ 1,737.11 an ounce. US gold futures fell 0.1% to $ 1,741.6.
Crude oil prices rose on the back of improved global economic outlook, but were held back by rising gasoline inventories.
Crude oil in the US closed at $ 59.77 a barrel, down 0.74%, while the price of Brent crude rose 0.67% to $ 63.16 a barrel.
(Reporting by Chibuike Ogu in New York; editing by Stephen Coates)