Asia stocks soar, dollar drops.
Jerome Powell, who is the Federal Reserve Chairman, stated that the central bank of the US is ready to cut interest rates. Powell signalled that you can expect the rate cut later this month and according to his statements, the US economy is at risk.
“A rate cut in July is now all but certain. The strength of last week’s jobs number did lead some to think that the Fed may pause for thought. It’s clear from this that they won’t,” said James McCann, senior global economist at Aberdeen Standard Investments.
After Powell made the statement on Thursday, shares rose in Asia. While the dollar fell, Asian shares started advancing including the South Korean and Hong Kong markets that started outperforming.
According to Reuters, MSCI’s broadest index
of Asia-Pacific shares outside Japan rose 0.8%, while Japan’s Nikkei added 0.4%
and the Shanghai Composite Index advanced 0.8%, whereas South Korea’s KOSPI
climbed 1% and Australian stocks edged up 0.3%.
After Jerome Powell’s remarks, the American Stock Market Index “S&P 500” rose above 3,000 for the first time.
Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management said, “The markets had hoped for Powell to express dovish views and they got what they wanted.”
(Reference: Bloomberg, Reuters, newsobserver, zeebiz)
(Photograph: A woman walks past an electric screen showing world markets indices outside a brokerage in Tokyo, Japan, July 1, 2019. REUTERS/Issei Kato)