Wednesday, 27 September 2017

Mixed dynamic in Asia; fresh reports in focus

Posted by Valentine at 10:29 Labels:

Asian markets were mixed on Wednesday as market sentiment continued to improve while waiting for fresh economic reports to set the tone later in the week.

Australia ASX -8.60 -0.15% 5,721.00 OPEN
Shanghai Comp +1.10 +0.03% 3,344.68 CLOSED
Hang Seng Index +122.25 +0.44% 27,635.26 CLOSED
Nikkei 225 -68.57 -0.34% 20,261.62 OPEN
TSEC 50 Index +79.42 +0.77% 10,336.44 OPEN

Safe-haven assets such as gold retreated overnight as investors opted to take profits after a recent jump, but tensions in the Korean peninsula continued to weigh on market sentiment.

The second session of the week was not particularly strong on the data front, with the Conference Board’s Consumer Confidence in America dropped to 119.8 in September from a prior reading of 120.4 and a forecasted value of 120.0.

Also, new home sales in the US declined by 3.4 percent in August to a seasonally adjusted 560,000 units, falling short from an initially expected 588,000 and a previous read of 580,000.

Attention was also directed to a speech from Federal Reserve Chairwoman Janet Yellen on inflation, uncertainty, and monetary policy.

The chief regulator reassured that the Fed continues in its path to normalize monetary policy. She expects to raise one more time the short term interest rate later this year despite seeing a weaker-than-expected performance on inflation.

“Given that monetary policy affects economic activity and inflation with a substantial lag, it would be imprudent to keep monetary policy on hold until inflation is back to 2 percent,” said Yellen at the National Association for Business Economics in Cleveland.

According to Fed funds tracked by CME Group’s FedWatch program, investors are now pricing in a 76.4 percent probability of a 25 basis points interest rate hike by December.

News also came in from Washington as GOP lawmakers said the Senate won’t hold a vote on the so-called American Health Care Act, a bill designed by the Trump administration to repeal and replace Obamacare. According to Senator Lindsay Graham, a key sponsor of the bill, the issue will be again discussed after the tax bill is addressed.

The Treasury Department's Office of Foreign Assets Control (OFAC) announced sanctions targeting eight North Korean banking institutions and 26 individuals for offering financial support to the development of Kim Jong Un’s nuclear program.

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