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Asian Shares Slip to Cautiou After U.S. Data, G20

Asian Shares Slip to Cautiou After U.S. Data, G20

Gold Silver Reports – Asian stocks were off to a cautious start on Monday after a weekend meeting of the Group of 20 economic policymakers ended with no new coordinated action to spur global growth and as solid U.S. data revived expectation of a U.S. rate hike before year-end.

MSCI’s broadest index of Asia-Pacific shares outside Japan . While Australian shares were up 0.4 percent and South Korean shares were flat .KS11.

Japan’s Nikkei .N225 gained 1.0 percent largely on the overnight fall in the yen while U.S. stock futures ESc1 were little changed from late last week.

G20 finance ministers and central bankers agreed to use “all policy tools – monetary, fiscal and structural – individually and collectively” to reach the group’s economic goals, citing a series of risks to world growth.

Some market players say the statement could mildly underpin market sentiment, but the lack of any concrete action plans provided for few catalysts.

“The G20 communique basically says 1) the world is not as bad a place as markets think; and 2) if it gets worse we will use fiscal, monetary and structural policy aggressively to fix it,” Steven Englander, global head of G10 FX Strategy at CitiFX, said in a note to clients.

“In baseball parlance, they were aiming for a single in terms of restoring confidence and they probably achieved it,” he added.

Fresh U.S. economic data published on Friday revived expectations of Federal Reserve rate increases, helping to lift U.S. bond yields and the dollar.

Consumer spending rose solidly in January and underlying inflation picked up by the most in four years. Gross domestic product growth in the fourth quarter was revised higher, to a 1.0 percent annual rate.

The figures prompted Federal funds rate futures <0#FF:> to price in a more than 50 percent chance of one rate hike by the end of year, compared to almost zero percent chance in mid-February.

The two-year U.S. Treasuries yield US2YT=RR also hit a four-week high of 0.817 percent on Friday and last stood at 0.801 percent versus its Feb 11 low of 0.582 percent.

The greenback’s yield allure helped lift the dollar’s index against a basket of six major currencies .DXY =USD to a 3-week high of 98.26 on Friday. It last stood at 98.13.

As the dollar gained, the euro EUR= fetched $1.0920, having slipped to a three-week low of $1.0912 on Friday. In early Asia on Monday, it traded at $1.0931, flat on the day.

Although the British government managed to get G20 to agree to include a warning against “Brexit” in the statement, that appeared to have limited impact, with sterling trading slightly weaker at $1.3861.

In the oil market, U.S. crude futures CLc1 were little moved at $32.76 per barrel, holding on to their 11 percent gains made last week, its steepest weekly rise since August. – Neal Bhai Reports

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