19 Sep 2013
Asian stocks, Bonds soaring as “Tap off” is “Risk on”
FXstreet.com (Athens)- Asian Stocks, Bonds Jump on Fed decision to hold on its stimulus QE3 program ($85billions per month on asset purchases, approximately $1trillion a year).
The FOMC caught off guard the vast majority of traders who have priced in a light, modest tapering, the notorious “lite-tapering” as it was dubbed the recent days. As a matter of fact, the FOMC wording that pushed the “risk” button was as of “the Committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases.” Regarding Asian markets, Asian stocks jumped to a four-month high, bond yields and credit risk declined while industrial metals rallied after the Federal Reserve out of the blue deferred from reducing U.S. economic stimulus. Furthermore the Thai baht strengthened the most in six years.
The MSCI Asia Pacific Index climbed 1.9 percent as of 12:20 p.m. in Tokyo, set for the highest close since May 22. Standard & Poor’s 500 Index futures added 0.1 percent after the measure rose 1.2 percent to a record yesterday. Australian 10-year bond yields fell the most in more than six weeks. Copper jumped 1.6 percent and oil advanced 0.4 percent. The baht gained 2 percent, the Indian rupee surged 2.5 percent and the Malaysian ringgit was up 2.2 percent.
Raw-material producers posted the largest gains among the 10 industry groups on the MSCI Asia Pacific index. BHP Billiton Ltd., the world’s largest mining company, rose 1.8 percent. Rio Tinto Group, the second-biggest, advanced 3.1 percent and Newcrest Mining Ltd. jumped 7.5 percent. Today, we are ahead a relatively quiet Asian market day, as Chinese markets are closed on both Thursday and Friday due to the mid-Autumn festival (the Hong Kong Stock Exchange is shut on Friday only).
In terms of FX, the Aussie dollar roared higher overnight gaining the most of the major traded currency pairs as the perfect storm of technical and renewed global growth converged with the Fed’s decision and the US dollar’s collapse overnight. The US dollar collapsed from a dollar index value of 81.22 to 80.29. The Euro (1.3541) soared from the day’s low at 1.3337 with the Pound (1.6100) rallying more than 1.25%. USD/JPY collapsed from 100 points from 99.33 to sit at 98.13 but it was the Aussie dollar as well depicted above with the turbochargers burning rising to 0.9526 its highest level in exactly 3 months at one point before dropping back a little to sit at just below 0.9500 now.
The FOMC caught off guard the vast majority of traders who have priced in a light, modest tapering, the notorious “lite-tapering” as it was dubbed the recent days. As a matter of fact, the FOMC wording that pushed the “risk” button was as of “the Committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases.” Regarding Asian markets, Asian stocks jumped to a four-month high, bond yields and credit risk declined while industrial metals rallied after the Federal Reserve out of the blue deferred from reducing U.S. economic stimulus. Furthermore the Thai baht strengthened the most in six years.
The MSCI Asia Pacific Index climbed 1.9 percent as of 12:20 p.m. in Tokyo, set for the highest close since May 22. Standard & Poor’s 500 Index futures added 0.1 percent after the measure rose 1.2 percent to a record yesterday. Australian 10-year bond yields fell the most in more than six weeks. Copper jumped 1.6 percent and oil advanced 0.4 percent. The baht gained 2 percent, the Indian rupee surged 2.5 percent and the Malaysian ringgit was up 2.2 percent.
Raw-material producers posted the largest gains among the 10 industry groups on the MSCI Asia Pacific index. BHP Billiton Ltd., the world’s largest mining company, rose 1.8 percent. Rio Tinto Group, the second-biggest, advanced 3.1 percent and Newcrest Mining Ltd. jumped 7.5 percent. Today, we are ahead a relatively quiet Asian market day, as Chinese markets are closed on both Thursday and Friday due to the mid-Autumn festival (the Hong Kong Stock Exchange is shut on Friday only).
In terms of FX, the Aussie dollar roared higher overnight gaining the most of the major traded currency pairs as the perfect storm of technical and renewed global growth converged with the Fed’s decision and the US dollar’s collapse overnight. The US dollar collapsed from a dollar index value of 81.22 to 80.29. The Euro (1.3541) soared from the day’s low at 1.3337 with the Pound (1.6100) rallying more than 1.25%. USD/JPY collapsed from 100 points from 99.33 to sit at 98.13 but it was the Aussie dollar as well depicted above with the turbochargers burning rising to 0.9526 its highest level in exactly 3 months at one point before dropping back a little to sit at just below 0.9500 now.