In Asian Equity Markets stocks made cautious gains on Thursday as investors scented a possible slowdown in the pace of U.S. rate hikes, comforting bond markets and sending the dollar to a three-week low on the yen. The hint of a less aggressive Fed was enough to send MSCI’s broadest index of Asia-Pacific shares outside Japan up 0.5 percent. Japan’s Nikkei added 0.3 percent and South Korea 0.9 percent. In Australia, the ASX 200 rose 0.64 percent. Hong Kong’s Hang Seng Index was up 0.30 percent. China’s Shanghai Composite was up 0.83 percent while the Shenzhen Component was up 0.88 percent.
In Currency Markets the dollar fell to a three-week low versus the yen on Thursday after Federal Reserve Chair Jerome Powell assuaged investors’ worries about continued aggressive monetary tightening. The dollar was last down 0.81 percent at 135.50 yen. The euro, which is the most heavily weighted currency in the index, was little changed at $1.02025, but following a 0.82 percent jump overnight. Sterling was 0.08 percent higher at $1.21675, after rallying 1.06 percent on Wednesday. The dollar index edged 0.08 percent lower to 106.28 after falling 0.59 percent overnight.
In US Equity Markets stocks rose on Wednesday as the Fed raised interest rates as expected and comments by Fed Chairman Jerome Powell eased some investor worries about the pace of rate hikes. The Dow rose 1.37 percent, to 32,197.59, the S&P 500 gained 2.62 percent, to 4,023.61 and the Nasdaq Composite added 4.06 percent, to 12,032.42. Microsoft rose 6.7 percent after it forecast double-digit growth in revenue this fiscal year on demand for cloud computing services. Alphabet rose 7.7 percent, a day after it reported better-than-expected sales of Google search ads, easing worries about a slowing ad market.
In Commodities Markets U.S. crude oil exports surged to an all-time high last week, contributing to another fall in stockpiles, driven by overseas demand due to the big discount for U.S. crude when compared with international benchmark Brent. U.S. crude was up 2.3 percent to $97.15 a barrel while Brent gained 1.6 percent to $106.08 a barrel. Spot gold rose 0.2 percent to $1,720.57 per ounce. Spot silver rose 0.8 percent to $18.75 per ounce, platinum added 0.4 percent to $877.52, while palladium gained 1.1 percent to $2,031.65.
In European Equity Markets stocks rose on Wednesday as a string of strong results from companies including Russia-exposed lender UniCredit and Britain’s Smurfit Kappa provided some comfort in an otherwise gloomy environment. The STOXX 600 index closed 0.5 percent higher, with shares of French IT consulting firm Atos rising 16.2 percent to top the index on securing financing for a turnaround plan. UniCredit gained 8.6 percent after it raised its 2022 outlook and moved ahead with a proposed share buyback it had put on hold, helping Italy’s MIB index outperform its peers with a 1.5 percent climb.
In Bond Markets treasury yields edged lower as bonds rallied on Wednesday after the Federal Reserve hiked interest rates by 75 basis points as it tightens monetary policy in an effort to curb inflation while trying to steer the U.S. economy away from a hard landing. The two-year yield reversed course to fall 5.5 basis points to 2.988 percent as the 10-year fell 0.2 basis points to 2.785 percent. The yield on the 30-year Treasury bond was up 5.8 basis points to 3.066 percent. The breakeven rate on five-year U.S. Treasury Inflation-Protected Securities (TIPS) was last at 2.679 percent.