Asian Stocks Edge Up; Aussie Sinks on RBA Shift: Markets Wrap

Economics

Asian stocks saw another muted session Wednesday, with trading becalmed by Lunar New Year holidays. Australia’s dollar tumbled, along with its bond yields, after the central bank chief signaled a shift to a neutral stance on policy after long flagging prospective tightening at some point.

The Australian moves were a rare bit of action in the region. Futures indicated little excitement at the start of European and U.S. trading sessions as investors found little to spur new trades from U.S. President Donald Trump’s State of the Union address. Japanese shares climbed with those in Sydney after the S&P 500 Index posted a fifth day of gains on Tuesday. Oil held losses below $54 a barrel. Treasuries held steady and the yen edged higher.

Global equities are getting close to levels not seen since November, in part spurred by the Federal Reserve’s tilt toward a neutral policy stance. Further clues on what 2019 holds may come Wednesday from Fed Chairman Jerome Powell’s first public comments following the January meeting and interest-rate decision.

There’s also the looming meetings in Beijing next week between U.S. Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin and their Chinese counterparts. That could pave the way for talks between the presidents of the two countries, with tariff increases threatened to kick in on March 1. In a State of the Union speech that had long passages on hot-button political issues such as immigration, Trump said he will meet with North Korea leader Kim Jong Un in Vietnam on Feb. 27-28.

Elsewhere, Reserve Bank of Australia Governor Philip Lowe made waves by shifting closer toward what market pricing has been signaling for some time for monetary policy.

“Over the past year, the next-move-is-up scenarios were more likely than the next-move-is-down scenarios. Today, the probabilities appear to be more evenly balanced,” Lowe said in the text of a speech in Sydney Wednesday.

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