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Asia stocks hold at highs, sustained by bottomless stimulus

Reuters2021-02-11

* Asian stock markets :

* Markets mostly flat amid multiple holidays

* Asia shares ex-Japan already up 10% this year

* Treasuries rally on surprisingly soft CPI, dovish Powell

* Oil eases after longest winning streak in two years

By Wayne Cole

SYDNEY, Feb 11 (Reuters) - Asian shares rested at record highs on Thursday as investors digested recent meaty gains, while bulls were sustained by the promise of endless free money after a benign reading on U.S. inflation and a dovish Federal Reserve outlook.

Adding to the torpor was a lack of liquidity as markets in China, Japan, South Korea and Taiwan were all on holiday.

MSCI's broadest index of Asia-Pacific shares outside Japan

added 0.1%, having already climbed for four sessions to be up over 10% so far this year.

Japan's Nikkei was shut after ending at a 30-year peak on Wednesday, while Australia's main index held near an 11-month top.

With China off, there was little reaction to news the Biden administration will look at adding "new targeted restrictions" on certain sensitive technology exports to the Asian giant and would maintain tariffs for now.

Futures for the S&P 500 and NASDAQ were both steady, having hit historic highs on Wednesday. EUROSTOXX 50 futures and FTSE futures barely budged.

Still, the outlook for more global stimulus got a major boost overnight from a surprisingly soft reading on core U.S. inflation, which eased to 1.4% in January.

Federal Reserve Chair Jerome Powell said he wanted to see inflation reach 2% or more before even thinking of tapering the bank's super-easy policies.

Notably, Powell emphasised that once pandemic effects were stripped out, unemployment was nearer 10% than the reported 6.3% and thus a long way from full employment.

As a result, Powell called for a "society-wide commitment" to reducing unemployment, which analysts saw as strong support for President Joe Biden $1.9 trillion stimulus package.

Indeed, Westpac economist Elliot Clarke estimated over $5 trillion in cumulative stimulus, worth 23% of GDP, would be required to repair the damage done by the pandemic.

"Historical experience provides strong justification to only act against undesired inflationary pressures once they have been seen, after full employment has been achieved," he said.

"To that end, financial conditions are expected to remain highly supportive of the U.S. economy and global financial markets in 2021, and likely through 2022."

The mix of bottomless Fed funds and a tame inflation report was a salve for bond market pains, leaving 10-year yields at 1.12% from a 1.20% high early in the week.

That in turn weighed on the U.S. dollar, which slipped to 90.395 on a basket of currencies and away from a 10-week top of 91.600 touched late last week.

The dollar eased to 104.57 yen , from a recent peak of 105.76, while the euro rallied to $1.2122 from its low of $1.1950.

In commodity markets, gold was sidelined at $1,838 an ounce

as investors drove platinum to a six-year peak on bets of more demand from the automobile sector.

Oil prices took a breather, having enjoyed the longest winning streak in two years amid producer supply cuts and hopes vaccine rollouts will drive a recovery in demand.

"The current price levels are healthier than the actual market and entirely reliant on supply cuts, as demand still needs to recover," cautioned Bjornar Tonhaugen of Rystad Energy.

Brent crude futures eased back 40 cents to $61.07, while U.S. crude dipped 36 cents to $58.32 a barrel.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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Comment121

  • Jason1989
    ·2021-02-16
    STI 3000
    Reply
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  • JWZ137
    ·2021-02-16
    Wow
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  • Dummy_Inv
    ·2021-02-16
    [齜牙] [齜牙] Good 
    Reply
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  • mambo
    ·2021-02-16
    Up up up
    Reply
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  • dlhz
    ·2021-02-15
    Cool
    Reply
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    • SunRay
      hmmm
      2021-02-15
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  • SeanHo
    ·2021-02-15
    Good
    Reply
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    • Billie Lo
      Yes
      2021-02-15
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    • SeanHo
      Really?
      2021-02-15
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    • Billie Lo
      [开心]
      2021-02-15
      Reply
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    View more 1 comments
  • Alanchin
    ·2021-02-15
    Keep going up
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  • Jansen127
    ·2021-02-15
    Wow
    Reply
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  • Otahman
    ·2021-02-15
    Just for coin haha pls like and reply 
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  • Iykyk
    ·2021-02-15
    Good 
    Reply
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  • Albaakbert
    ·2021-02-15
    Great read
    Reply
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  • Albaakbert
    ·2021-02-15
    Hi hi Low low
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  • DarylBin
    ·2021-02-15
    WOW
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  • SKHan
    ·2021-02-15
    Keep it going!
    Reply
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  • KW1
    ·2021-02-15
    Seems like good time to buy more stock.
    Reply
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  • Aashish
    ·2021-02-15
    Looks good 
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  • Silverone
    ·2021-02-15
    Holding on 
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  • KRPK
    ·2021-02-15
    Bottomless stimulus. Wah....
    Reply
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    • KRPK
      Will see What happens
      2021-02-15
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  • PierreTan
    ·2021-02-15
    Bull year for all
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    • PierreTan
      [美金] [美金] [美金]
      2021-02-16
      Reply
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    • Mxxww
      Huat ah
      2021-02-16
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  • Geniex
    ·2021-02-15
     [財迷] [財迷] [財迷] 
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