Asian shares rise on the back of bank moves and U.S. data

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  • Stocks up across Asian markets
  • China’s moves add to bounce
  • Strong U.S. job data leads to investor confidence

On Monday, trading in the Asian stock markets rose in the wake of the latest moves by central banks and strong U.S. jobs data.

China’s central bank made an announcement on Friday regarding a further easing in policy that will see an estimated $116 billion for new lending become available. Chinese stocks rose accordingly, further buoyed by Chinese and U.S. counterparts meeting for trade negotiations this week.

National Australia Bank FX Strategy Head Ray Attrill commented: “This year we might reasonably expect to see as many as four 100 basis point [reserve requirement ratio] cuts and, in the absence of capital outflow pressures on the currency, quite possibly cuts to the benchmark one-year lending rate as well.”

Shanghai blue chip index .CSI300 gained 0.4% following on from a rise of 2% last Friday, while MSCI’s broadest index of Asia-Pacific shares outside Japan saw an increase of 1.3%. The Nikkei in Japan added 2.8%, and South Korea’s markets followed suit with a rise of 1.2%.

Adding to the air of optimism, the U.S. payrolls report that was released last Friday revealed that December saw the creation of 312,000 net new jobs, and wages rose at an annual rate of 3.2%.

U.S. Federal Reserve Chairman Jerome Powell said that the central bank’s policy decisions this year would be patient and flexible. With high market expectations for a rate cut this year, Powell’s emphasis on the term “patient” in his speech on Friday sought to calm the waters.

With the Fed fund futures implying a rate of 2.33% by December 2019 in comparison to the effective current rate of 2.40%, all eyes will be on Powell’s next speech on Thursday and at the eight other Fed officials who are expected to speak this week.

Brian Ducey

Brian graduated from Chaminade High School and the University Of Vermont Kalkin School Of Business with a concentration in Finance. He began his career with Knight Capital Markets, working his way to market maker. Brian later expanded his market repertoire, working with various sell-side research brokerage firms, such as Sidoti & Co., and William O’Neill & Co., as an Account Executive. With over 20 years-experience in the financial industry, Brian has built a unique perspective into “market intelligence” understanding an ability to read the tape and apply second level thinking in a fast paced environment. Brian also carried several market licenses, including the series 7, 24, 55, 65, and 63 licenses as well as previously passing The Connecticut Life and Health Insurance Exam