Asian stocks extend recovery gains on signs of further stimulus from G7
- Asian equities remain on the front foot as buyers anticipate additional measures from the governments, central banks to counter coronavirus.
- RBA’s rate cut, confirmatory rhetoric from Japanese PM keep the hope of G7 support alive.
- Coronavirus keeps spreading outside China, developed economies are in the trouble off-late.
In addition to the RBA’s 0.25% rate cut, expectations of G7 stimulus keep the Asia-Pacific equities on the front-foot for the second consecutive day. While portraying the same, the MSCI index of Asia-Pacific shares outside Japan registers 1.0% gains during the pre-European session on Tuesday.
Japan’s NIKKEI failed to hold onto the early-day gain as PM Shinzo Abe turned down calls of BOJ easing while showing readiness to take fiscal measures during today’s G7 meeting.
Coronavirus outbreak in the US took four lives so far, not to forget emergency in the Redmond, whereas the UK PM Boris Johnson cited widespread contagion of the COVID-19.
To tame the economic fallout from spreading coronavirus will be the key agenda of G7 financial leaders who will be joining on the conference call at 12:00 GMT on Tuesday. While Reuters has turned down expectations of any drastic moves, US President Donald Trump’s push for the Fed rate cut is likely weighing on the US dollar and inflating odds of further liquidity infusion by the key central banks.
As a result, the US 10-year treasury yields remain positive near 1.112%. However, the latest update concerning coronavirus from the US seems to have been weighing on the S&P 500 Futures.
Investors will now concentrate on the G7 updates for the immediate direction. The discussions will be led by the US Treasury Secretary Steve Mnuchin and the Fed Chair Jerome Powell and may stretch on to Wednesday for any final communiqué.