Wednesday 06:00 GMT
Overview
Stocks across Asia were mostly higher after Donald Trump addressed Congress for the first time, with the US president striking a slightly more optimistic note than in recent speeches but providing little clarity on his administration’ economic policies.
European bourses are expected to open firmer, with spreadbetters predicting the UK’s FTSE 100 will add 20 points to 7,284 and Germany’s Dax to gain 30 points to 11,865. US index futures suggest the S&P 500 will advance by 4.5 points to 2,368.4 — a fraction below its record highs — when trading gets under way later in New York.
Hot topic
The US dollar swung into focus as William Dudley, head of the New York Federal Reserve, said in an interview with CNN that the prospects for adding to December’s rate rise had become “a lot more compelling”. The chance of a 25-basis-point rate rise in March climbed to 52 per cent compared with 36 per cent a week ago.
The dollar index pared gains as Mr Trump began his address, but later recovered to be 0.4 per cent higher at 101.56.
On Monday, Robert Kaplan, president of the Dallas Fed, joined the chorus of policymakers floating the idea of tighter monetary policy, saying the US central bank may need to raise interest rates “sooner rather than later”.
Equities
Japan’s Topix was up 1.2 per cent while Hong Kong’s Hang Seng gained 0.1 per cent. The energy and telecommunications sectors pushed Australia’s S&P/ASX 200 down 0.1 per cent.
China’s Shanghai Composite added 0.4 per cent. Although not known for its sensitivity to economic data, two separate surveys showed that China’s manufacturing sector continued to improve in February.
Forex
The Australian dollar enjoyed an initial surge against the greenback after data showed that gross domestic product rebounded in the December quarter, helping the country avoid what could have been the country’s first recession in 25 years.
However the recovery of the US dollar meant its Aussie counterpart pared gains of as much as 0.5 per cent to be up 0.1 per cent at $0.7663 in early European trading.
The Japanese yen also fell as the dollar strengthened, and was 0.7 per cent weaker at ¥113.57 per dollar — facing its biggest one-day drop in three weeks.
Commodities
Oil prices rebounded following three days of decline. Brent crude, the international benchmark, was up 0.2 per cent at $56.62 while West Texas Intermediate gained 0.1 per cent to $54.07.
Gold was down 0.3 per cent at $1,245 an ounce.
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