Thursday 02.00 GMT
Overview
Stock markets were mixed in Asia after the US Federal Reserve left interest rates unchanged but hinted at further rises this year. The Australian dollar gained against its US counterpart on data showing a record trade surplus, while oil pared back some of Wednesday’s gains.
Hot topic
The Australian dollar gained 0.6 per cent to A$0.7627, its highest in three months after data showed the country’s trade surplus had risen to a record high in December.
Paul Dales, chief Australia and New Zealand economist at Capital Economics, said the “surge in the trade surplus to a record high in December shows that the rise in commodity prices is boosting the economy and it has dramatically reduced the chances that Australia fell into a recession late last year”.
More broadly the dollar was wobbling against a raft of currencies in morning trading, with the dollar index — a measure of the greenback against a basket of peers — was down as much as 0.1 per cent before recovering to be flat.
South Korea’s won was the other big winner in the region, with a rise of 0.6 per cent against the dollar to Won1,151.75. Japan’s yen also continued to strengthen, firming 0.2 per cent to ¥113.08 per dollar.
The pound was up 0.1 per cent at $1.2674, while the euro rose by the same amount to $1.0782.
Equities
Asian stock markets were struggling to find firm footing in Asia trading. Tokyo’s broad Topix index was down 0.4 per cent in morning Asia trade while the Nikkei 225 Index shed the same amount.
Australia’s S&P/ASX 200 pared earlier gains to be up 0.1 per cent after the Australian dollar strengthened. Real estate shares were down 1.1 per cent, while materials stocks climbed 0.7 per cent.
In Hong Kong, the Hang Seng index was down 0.2 per cent after rising as much as 0.4 per cent at the outset. A 1.3 per cent rise from consumer staples stocks was offset by a 0.2 per cent drop in the real estate segment. Markets in China remained closed for the lunar new year holiday.
Commodities
Oil prices were retreating from the previous day’s gains during the morning session. Brent crude, the international benchmark, was down 0.4 per cent at $56.59 per barrel after closing 2.2 per cent higher on Wednesday. West Texas Intermediate, the US marker, was down 0.5 per cent at $53.61 per barrel after closing 2 per cent higher the day prior.
Gold was up 0.3 per cent at $1,212.51 an ounce, regaining some of its lustre after a drop of 0.1 per cent on Wednesday ended three consecutive days of gains.
Fixed income
The yield, which moves inversely to price, on 10-year Australian government bonds rose 4 basis points to 2.781 per cent, as stocks in Sydney struggled to hold on to morning gains.
Movements were otherwise muted in fixed income, with the yield on 10-year Japanese government bonds down 1bp and that on 10-year US Treasuries up 1bp.
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