ASIA STOCKS FIRM AS U.S. STIMULUS PACKAGE MOVES, FED KEEPS RATES
Asian stocks were set for gains on Thursday, December 17, 2020, as progress toward a long-awaited US stimulus package and a pledge by the Federal Reserve to keep interest rates low helped the Nasdaq benchmark to a fresh record high, Tom Westbrook and David Henry reported for Reuters.
Australia’s S&P/ASX benchmark rose 0.64% in early trading. Japan’s Nikkei 225 futures added 0.02% while the e-mini futures for the S&P 500 rose 0.07%, following another strong Wall Street finish. On Wall Street, the Nasdaq Composite booked another record close at 12,658.19, up 0.5% for the day. The S&P 500 gained 0.2% and the Dow Jones Industrial Average slipped 0.2%.
U.S. Treasury yields increased slightly, however, with the benchmark 10-year yield up 0.4 basis point to 0.925% on Wednesday afternoon. Oil prices edged higher on Wednesday, buoyed by U.S. government data that showed crude stockpiles fell last week and by optimism about the U.S. coronavirus relief package.
Spot gold prices initially dipped on the Fed announcement, but then rose 0.5% to $1,862.72 an ounce. Bitcoin broke through $20,000 for the first time on Wednesday, gaining more than 9% to $21,316 late in the day.
The move came amid increased institutional and corporate interest.
The Fed said on Wednesday it would stick with its policy of low interest rates while legislators moved closer to agreeing on an additional $900 billion of COVID-19 aid, including $600 to $700 stimulus checks and extended unemployment benefits.
“Chairman (Jerome) Powell assured the world that the Fed will extend its asset purchase program if economic growth slows,” said Michael McCarthy, chief strategist at broker CMC Markets in Sydney.
“The re-assurance saw the markets continue on their optimistic path,” he said, but added that some bond traders had been looking for more, prompting a selloff that steepened the US curve.