Asian stocks rebound from year-long low, but Omicron and Fed take center stage By Reuters – .

Asian stocks start on a cautious note amid rising COVID-19 cases By Reuters – .

© Reuters. FILE PHOTO: Syringes with needles are seen in front of a displayed stock chart and the words “Omicron SARS-CoV-2” in this illustration taken November 27, 2021. REUTERS / Dado Ruvic / Illustration / File Photo


By Alun John

HONG KONG (Reuters) – Asian stocks fell from a one-year low on Wednesday as US stock futures and oil recovered from the previous day’s sell-off, but uncertainty over the impact of the Omicron coronavirus variant has kept investors on the lookout.

U.S. Treasury yields rose, supporting the dollar after Fed Chairman Jerome Powell almost indicated the Fed would step up the pace of its asset purchases at its meeting later this month.

“Right now the market is focused on Omicron and the potential it can disrupt the world, but the real focus should be on the Fed and rate policy. It’s the biggest shock to come out of the last day or so, ”said Kerry Craig, global market strategist at JPMorgan (NYSE 🙂 Asset Management.

The largest MSCI index of Asia-Pacific stocks outside of Japan rose 0.6%, as traders believed Tuesday’s declines, which sent the benchmark to its lowest since November 2020, were gone a bit far. The gains were widely shared across the region.

rose 0.7%, also helped by a rebound in factory activity, while the United States rose 0.6% and Nasdaq futures rose 0.7% as sentiment s ‘returned after, the and had all closed more than 1.5%. [.N]

Powell said U.S. central bankers would discuss in December whether to end their bond purchases a few months earlier than expected, pointing to a strong economy, stalled workforce growth and a high inflation which is expected to last until mid-2022.

This has pushed US Treasury yields higher, particularly at the short end of the curve. The yield on two-year bonds, which reflects short-term interest rate expectations, recently stood at 0.6025%. That was up from 0.4410% on Tuesday, when traders speculated that the new variant could lead to a more accommodating Fed.

Benchmark 10-year bonds also sold, last losing 1.4919%, up from Tuesday’s two-and-a-half-month low of 1.4443%. [US/]

The higher yields allowed the dollar to stabilize against most of its peers and gain ground against the Japanese currency, rising to 113.4 yen. ()

The potential of the Omicron variant to slow the pace of the Fed’s cut had limited the dollar’s safe-haven status in the days following the news of the new strain last Friday.

The Australian dollar languished near a one-year low at $ 0.7138 as the stronger dollar meant it missed gains from other generally risky assets like Asian stocks.

Oil reacted more strongly and prices regained ground after sharp drops in the previous session, ahead of a meeting of the Organization of the Petroleum Exporting Countries (OPEC). [O/R]

US West Texas Intermediate (WTI) crude futures rose 1.9% to $ 67.43 per barrel. Futures gained 2.22% to $ 70.78 a barrel.

However, the outlook for COVID is still very uncertain and governments, scientists and investors are trying to determine the level of protection current vaccines would offer against Omicron.

Gold, despite all the excitement, saw little safe-haven demand with a spot price of $ 1,776 an ounce, up 0.16% and well within its recent range.


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