Asian shares muted ahead of Fed comments

HONG KONG: Asian stocks were largely muted on Wednesday (Feb 28) after the release of lacklustre consumer confidence data, with comments from US Federal Reserve officials and fresh economic figures due later in the day.

Global equities mostly rose Tuesday, despite data showing pessimism among consumers in the United States and Germany.

The Conference Board reported a larger-than-expected drop in US shoppers' confidence in February, as survey participants expressed more concern about the labour market and the American political environment.

In Germany, consumers also remained downbeat about the economy and their propensity to make large purchases was largely unchanged from a month ago, according to pollster GfK.

US stocks ended Tuesday with little change, "as investors remain grounded ahead of critical economic data, including the Federal Reserve preferred inflation gauge, which is expected to shed some light on the timing of the first Fed cut", Stephen Innes, managing partner of SPI Asset Management, said in a note.

Traders will be examining the US Personal Consumption Expenditure (PCE) price index due Thursday, as well as US consumer income and initial jobless claims data released the same day.

Later Wednesday, investors will be looking out for comments from three Fed officials, which could offer fresh insights into the US central bank's rate cut outlook.

Expectations on a timeline for cuts to US borrowing costs have gradually shifted to later this year, as inflation data has come in hot and policymakers have indicated they need to see more signs that inflation is moving towards their 2.0 per cent goal.

"The rates market has shifted from an anticipated six rate cuts by the Federal Reserve in 2024 to just three, indicating that investors might find themselves on the wrong end of the stick if a top-side beat is big enough to threaten the 3 cut narrative," Innes said.

Adding to the recent chorus of officials, Fed governor Michelle Bowman said she expected inflation to continue declining with rates held at their current level, adding it was too early to begin reducing rates.

In Asia, Tokyo stocks opened flat on Wednesday, with the market "expected to start in a narrow range as US shares were mixed", according to senior market analyst Toshiyuki Kanayama of Monex.

Better-than-expected Japanese consumer inflation data released a day earlier stoked speculation among analysts that the Bank of Japan might raise interest rates in April or potentially even next month.

Unlike other major central banks, the BoJ has stuck to an ultra-loose monetary policy, putting pressure on the yen.

Shanghai rose at the open, while Seoul, Wellington, Mumbai, Jakarta and Manila were also trading higher.

Hong Kong, Sydney, Taipei, Singapore, Bangkok and Kuala Lumpur were down.

G20 finance ministers and central bank heads will meet in Brazil on Wednesday and Thursday, seeking ways to shore up a global economy whose nascent recovery is threatened by a raft of conflicts and crises, including the wars in Ukraine and Gaza.

Investors will turn their focus to Chinese manufacturing numbers on Friday. - AFP

Follow us on our official WhatsApp channel for breaking news alerts and key updates!

Asian , equities , Feb 28 , opening


Next In Aseanplus News

Asean news headlines as at 9pm on Wednesday (April 17)
Philippine ocean systems deteriorating, says study
Cyclist who clung to car bonnet in East Coast road rage case likely affected by brain tumour: Lawyer
Japan records best-ever monthly visitor numbers in March
Vietnamese carmaker VinFast reports Q1 net loss despite revenue rise
PBRS veteran Joseph Kurup passes away at 80
HK director Wong Jing draws mixed reactions after questioning Tony Leung's best actor win
Water-splashing festivals boost tourism in China, South-East Asia
SIA diverts Dubai-bound flight after heavy floods hit airport
Jail for infant care teacher who slapped baby for refusing to drink milk

Others Also Read