Asian Markets Soared, US Dollar Strengthens Amid Expectations Of Policy Tightening From The Fed
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Equities

Asian stock markets surged on Monday after investors digested PMI data from China and investors were awaiting the outcome of monetary policy meetings from the RBA, BOE, and FOMC, as well as the US NFP report.

The ASX 200 (+0.8%) found support amid economic reopening after Australia allowed fully vaccinated citizens to travel abroad.

The Nikkei 225 (+2.5%) was driven by the weakness of the Japanese Yen and after the LDP party remained with a majority in the lower house.

Hang Seng (-1.5%) while Shanghai Composite (+0.1%) amid the publication of the company’s earnings report and after mixed Chinese PMI data.

Commodities

WTI crude futures slipped to $ 83.2 a barrel on Monday after China reported that it was releasing petrol and diesel reserves to boost market supply and support price stability.

Gold prices traded below the $ 1,790 level, weighed down by a rising U.S. dollar after the latest inflation reading in the United States rose more than expected, giving hope that the Fed will tighten its policy sooner.

Forex

The US dollar crossed the 94.20 level on Monday amid hopes of an earlier-than-expected Fed policy tightening after the latest reading of US inflation rose more than forecast.

The NZD is strong amid good market environment and investors are now paying close attention to RBNZ Governor Adrian Orr’s speech on Tuesday, which will provide more clues ahead of the next RBNZ meeting.

The pound is under pressure in the wake of talks between UK and French leaders amid ongoing tensions and recent pressure to punish the UK over its Brexit issue.

Meanwhile, UK Brexit Minister Frost also stated that they were actively considering resolving the issue, while French President Macron warned that Britain had 24 hours to give way in a fisheries dispute or they would enact trade sanctions.

The JPY slumped amid risk-on sentiment in the market and after the LDP party won the general election in Japan, which paved the way for Japanese Prime Minister Fumio Kishida to continue his stimulus plan.