By Swati Pandey
SYDNEY (Reuters) – Asian markets marked time on Thursday with two major centers – Japan and China – closed for holidays while the dollar held overnight accommodation after the US central bank poured cold water on inflation expectations.
Australian shares fell 0.7 percent, while New Zealand was up 1
E-Mini futures for them were unchanged. In early European trades, the pan region was down 0.23 percent at 3,444, German was 0.18 percent lower at 12329, while futures were down 0.36 percent at 7.35.5.
Trading in Japan will continue next Tuesday while China will be back in action on Monday.
Global stock markets have shelled new heights since the beginning of the year largely on the expectation of simple monetary policy around the world, while a positive tone of trade negotiations between the United States and China has also helped feelings.
But analysts are now wondering if this strong race can continue.
"In May, the search for the next catalyst begins an obvious necessary condition to answer the traditional question: is it time to sell and go away?" said Claudio Irigoyen, economist at Bank of America-Merrill Lynch.
Irigoyen referred to a well-known proverb, "selling in May and going away", which warns investors to dump their stock holdings in May ahead of the northern hemisphere summer trade lull and switch to fixed income in a bid to maximize returns.
"We are still constructive that the recovery in China will lead to recovery in the growing market's export complex and Europe, the worst case scenario will be avoided with Brexit, and the latest advances will work in a US deal. and China in 2Q, says Irigoyen.
"It follows that the general environment is therefore still beneficial for the EM, not so much because of cheap valuations, but still attractive enough risk-adjusted bear. "
Investors are watching the quarterly earnings for clues to US corporate health.
S & P 500 revenues are now expected to show a growth of 0.5 percent in the quarter, according to Refinitive Data – a stronger better result than in early April when revenues are expected to fall by 2 percent.
In foreign exchange markets, the greenback took a breather after strong overnight gains after the US central bank kept the target rate for the key rate unchanged at the May meeting.
Markets had expected the Fed to signal a "cautionary cut" to halt inflation, but "the statement gave almost nothing away in this regard," said Anna Stupnytska, global economist of Fidelity International, in an email.
It held 97.62 against a basket of major currencies having gone as high as 97,728 on Wednesday, accounting for 111.61 yen after concentrating lightly from a four-month high of 112.39 in early spring Give week
Fed's mixed policy messages have been a killing of the dollar. It downgraded the inflation outlook and made a technical cut in interest rates on surplus reserves. Nevertheless, Fed leader Jerome Powell says the factors that push inflation can be "transient," and he saw no case for a move in both directions.
"As he pushed the potential for a price cut, he just emphasized that the committee is satisfied with the current political stance and does not give much more to the markets to cling to." Stupnytska added
Dollar hawks also received a boost from early data on the labor market, as a report from payroll processor ADP (NASDAQ 🙂 showed that US private employers added 275,000 jobs in April, well over 180,000 estimates.
Nevertheless, reports of construction costs and US production came in weaker than expected, conflicting signals sent out the strength of the economy.
In commodities, oil prices went down after data showed that production production set a new record last week, but the losses were curtailed by the intensifying crisis in Venezuela and the halt of Iranian oil sanctions departing from Washington. [O/R]
U.S .. raw was last from 27 cents at 63.32 dollars a barrel while slipping 33 cents to 71.86 dollars.
was marginally weaker at $ 1,271.55 an ounce.