Talking Points:
- Asian stocks rose broadly
- Wall St. gave them a head start, hopes for peace on the Korean peninsular helped further
- The Bank of Japan left its policy settings alone
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Asian stocks were higher across the board Friday as a combination of earnings-led Wall Street gains and hopes for the ongoing summit between North and South Korea lifted the mood.
The Nikkei 225 ended up 0.66%, with the ASX 200 0.6% higher and South Korean and Chinese indexes all in the green.
The Bank of Japan left all its monetary policy settings on hold as had been widely expected. It also dropped the timeframe by which it expects consumer price rises to hit 2%. It still thinks they’ll get there, but isn’t saying by when. Previously the second half of next year had been regarded as likely.
The US Dollar remained close to 3.5-month highs against a basket of its major, traded rivals. Rising US Treasury yields are still polishing Dollar bulls’ case. Meanwhile the Euro remains under pressure thanks to Thursday’s European Central Bank policy meeting after which President Mario Draghi allowed that Eurozone growth had moderated. The New Zealand and Australian Dollars are also weakening as investors contrast prognoses of a still eagerly rate-tightening US Federal Reserve with with the home central banks of both commodity units which are still thought to be on hold for the foreseeable future.
AUD/USD has reached lows not seen since December 2017 and is very close to the significant lows made early in that month.
Gold prices were lower again thanks to that stronger US Dollar and seem set for their heaviest fall in four weeks of weakness. Crude oil prices slipped despite market concerns about security of supply from Iran.
There’s plenty of meat left on Friday’s economic bones with a plethora of data and speakers still to come before traders can start their weekends. German unemployment numbers are coming up, along with UK growth figures. US GDP is up too, of course, along with the University of Michigan’s consumer sentiment roundup. The Bank of England’s Mark Carney is due to speak, as are various European Central Bank luminaries including Executive Board member Sabine Lautenschlager. Swiss National Bank Board members will also be heard from at its Annual General Meeting in Berne.
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— Written by David Cottle, DailyFX Research
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