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© Reuters. A man wearing a protective mask talks on his mobile phone in front of a screen displaying the Nikkei index in Tokyo
By David Henry
NEW YORK (Reuters) – Asian stocks pointed to gains on Thursday, as the move toward a long-awaited US stimulus package and the Federal Reserve’s promise to keep interest rates low helped the benchmark Nasdaq index hit a new record.
Australia’s benchmark S & P / ASX index rose 0.64% in early trading. {{178 | Neither Japan added 0.02% while e-mini futures rose 0.07%, following another strong finish on Wall Street.
The Fed said Wednesday it will maintain its policy of low interest rates as lawmakers move closer to agreeing to an additional $ 900 billion of COVID-19 aid, including $ 600 to $ 700 stimulus checks and extended unemployment benefits.
“President (Jerome) Powell assured the world that the Fed will extend its asset purchase program if economic growth slows,” said Michael McCarthy, chief strategist at brokerage CMC Markets in Sydney. “The reaffirmation kept markets on their optimistic path,” he said, but added that some bond traders had been looking for more, triggering a selloff that steepened the US curve.
On Wall Street, it posted another record close at 12,658.19, up 0.5% on the day. The S&P 500 gained 0.2% and fell 0.2%.
However, yields on US Treasuries rose slightly, and the benchmark 10-year yield rose 0.4 basis points to 0.925% on Wednesday afternoon.
The Fed said it will keep its one-day benchmark interest rate near zero until an economic recovery is complete and will now link its monthly government bond purchase program to that same target.
Officials slightly raised their outlook for economic growth next year to 4.2% from 4.0% and lowered their expected unemployment rate to 5% from 5.5%.
The dollar initially rose slightly after the Fed announcement, but was soon down 0.2% on the day, around a two-year low.
Strategists at the Commonwealth Bank of Australia (OTC 🙂 said the dollar’s downward trend will continue due to the weight of the US current account deficit and the attractiveness that an improving world economy will give to other currencies.
Oil prices rose on Wednesday, driven by data from the US government that showed crude stocks fell last week and by optimism about the US coronavirus relief package.
Prices initially fell after the Fed’s announcement, but then rose 0.5% to $ 1,862.72 an ounce.
[BTC=BTSP] broke $ 20,000 for the first time on Wednesday, gaining more than 9% to $ 21,316 at the end of the day. The move came amid heightened institutional and corporate interest.
The cryptocurrency has nearly tripled this year, driven by demand from large investors drawn by its potential for quick profits, its alleged resistance to inflation, and expectations that it will become a mainstream payment method.
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