© Reuters. Men in protective face masks chat in front of a screen in Tokyo that shows the average of Nikkei stocks and global stock indices during the coronavirus disease (COVID-19) outbreak
By Tom Westbrook and Imani Moise
SINGAPORE / NEW YORK (Reuters) – Asian stock markets rose on Wednesday, wiping off the weaker end of Wall Street after US President Donald Trump abruptly cut off business negotiations with lawmakers.
Trump canceled talks with Democrats in a tweet, saying negotiations will be suspended until after the election if he promises a major stimulus package.
That put Wall Street down and safe assets like the dollar and bonds soaring higher. However, investors in Asia appeared less unsettled and felt that incentives were being delayed rather than derailed.
MSCI's broadest index for stocks in the Asia-Pacific region outside of Japan rose 0.2% to a new two-week high, led by a 0.8% gain in Australia, where an expansive budget lifted stocks.
Broad gains in Hong Kong rose 0.7% while falling 0.2%.
S&P 500 futures wobbled on either side of the apartment and found support from Trump tweets promising support for individual fiscal incentives. The dollar was stable at its highest level ever for the week. Oil prices fell and the strong dollar pushed gold to a week-long low.
"There are a few ways we can still get momentum, but none of them are coming up now before the elections," said Rob Carnell, ING's chief economist in Asia, as both candidates promise.
"One way or another we're going to get an incentive, it's just that we're not going to get it now – so we're going to tread a little water."
China's stock, bond and currency markets are closed for public holidays until October 9th.
The end of US economic talks comes as a few wobbles hit global coronavirus recovery.
Attitudes in the US are slowing and on Tuesday Jerome Powell, chairman of the US Federal Reserve, warned of the risks if authorities did too little to support the economic recovery.
"The risk of exaggeration seems to be lower for now," said Powell. "Even if policies ultimately turn out to be bigger than necessary, they won't be in vain."
US markets, which had rallied for several weeks in hopes of a breakthrough in economic talks, rebounded on Tuesday. The Dow was down 1.3%, the S&P 500 was down 1.4% and the Nasdaq was down 1.6%.
COUNT THE MINUTES BELOW
The overnight flight to safety partially resolved the steepest sell-off in the US bond market in about a month. The benchmark 10-year US Treasury bond yield fell two basis points to 0.7403%.
Forex traders also bought back dollars, hitting their highest level since late last week, leaving both currency and bond markets cautiously ahead of the Fed minutes' release at 1800 GMT.
Investors are looking for clues as to how Fed members are thinking about the central bank's new and more accommodative approach to inflation and what they could do to boost it.
"We believe the risks lie in the extent of the disagreement within the FOMC rather than the possible mild surprise," said Steve Englander, director of FX research for Standard Chartered (OTC 🙂 Bank.
The risk-sensitive New Zealand dollar was at a week-long low of $ 0.6577. The euro was marginally lower at $ 1.1725.
That touched a weekly low of $ 0.7095, and Australian government bonds rebounded across the curve as investors bet a dovish tone from the central bank announcing further monetary easing and possibly more bond purchases.
Jitter persisted in the commodity markets and oil futures gave up some of their recent gains on supply concerns.
With stocks rising above expectations, West Texas Intermediate Futures fell about 2% to $ 39.91 a barrel. The futures fell 1.5% to $ 42.01 a barrel.
was stable at $ 1,879 an ounce after being hit by a rising dollar overnight.