Asian stocks bounced sharply from the lowest year, with Omicron, the Fed in focus

HONG KONG, DECEMBER 1 (Reuters) – Futures of US and European equities rose on Wednesday, oil rose and Asian equities were heading for their best day in almost two months as traders reversed after a sharp sell-off the day before the regional benchmark index a Lowest 12 months.

In the spotlight competition, US government bond yields rose steadily after US Federal Reserve Chairman Jerome Powell signaled that the Fed could accelerate the pace of bond purchases at its meeting later this month.

MSCI’s broadest index of Asia-Pacific equities outside Japan (.MIAPJ0000PUS) rose 1.3%, which would be the best daily increase since early October, when traders determined Tuesday’s fall, sending the benchmark index to its lowest since November 2020. gone too far. .

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Although it helped the regional benchmark index decline this week’s sales, it is still around 2% below Thursday’s end before news of the latest variant of the new coronavirus tracked the markets.

The rise in equities in Asia seemed to continue in European and American trade. Nasdaq 100 futures rose 1.35%, S & P500 futures rose 0.78%, Euro Stoxx 50 futures rose 0.63% and FTSE futures rose 0.67%.

“As the market really oversold and over-digested Omicron, it makes sense for asset prices to pick up again,” said Edison Pun, senior market analyst at Saxo Markets.

On Tuesday, MSCI’s benchmark for equities across the globe (.MIWD00000PUS) had fallen 1.5%, prompted by a warning from drug maker Moderna that existing vaccines are unlikely to be as effective against the Omicron variant as against other strains.

Hong Kong (.HSI) rose 1.2% and Korea (.KS11) 2.2% to lead Wednesday’s rise, although both recovered from the 12-month low the day before.

Oil also recovered after a sharp fall in the previous session, ahead of a meeting of the Organization of the Petroleum Exporting Countries (OPEC). read more

US West Texas Intermediate (WTI) crude oil futures rose 2.5%, to $ 67.86 a barrel. Brent oil futures increased by 2.7% to $ 71.12 per barrel.


The other main issue that investors are thinking about was the rate at which the US Federal Reserve will reduce its massive stimulus program and when it will raise interest rates.

“Right now, the market focus has been on Omicron and the potential that could disrupt the world, but the real focus should be on the Fed and interest rate policy. It’s the biggest shock that has come out of the last day or so,” said Kerry Craig global marketing strategist at JPMorgan Asset Management.

On Tuesday, Powell said that in December, US Federal Reserve will discuss whether to close bond purchases a few months earlier than expected, indicating a strong economy, halted labor force growth and high inflation, which is expected to last into mid-2022.

This pushed up US government interest rates, especially at the short end of the curve.

The yield on two-year notes, which reflects short-term interest rate expectations, rose to as high as 0.6060% on Wednesday, up from as low as 0.4410% on Tuesday, when traders speculated that the new variant could lead to a more dove-like Fed.

Benchmark 10-year banknotes were also sold, and last yielded 1.4800%, up from Tuesday’s low of two and a half months at 1.4443%.

Rising interest rates led to the dollar stabilizing against most peers and gaining ground in the Japanese currency, rising to 113.4 yen, with the safe harbor yen damaged by the risk-averse mood. FRX

That sentiment also helped the Australian dollar rise 0.6% from Tuesday’s low of 32 months.

Gold, despite all the excitement, saw little demand for safe haven with the spot price of $ 1,779 per ounce, up 0.3%.

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Reporting by Alun John; editing by Richard Pullin

Our standards: Thomson Reuters Trust Principles.

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