Asian stocks fell on Thursday (May 26, 2022) as minutes from the Federal Reserve’s early May meeting revealed.
According to the Fed meeting minutes on May 4, 2022, all participants approved a half-point rate hike. Moreover, most participants believed that more hikes of a similar scale would likely be appropriate at the Fed meetings in June and July.
The minutes also emphasized policymakers’ confidence in the strength of the U.S. economy, lifting the tone on Wall Street overnight. However, labor market tightness and high inflation, the Ukraine crisis, and extended coronavirus lockdowns in China are also focused. These issues push inflationary risks to the upside. Finally, investor anxiety over these issues has brought MSCI down 0.54 percent after trading higher earlier in the day.
However, sentiment in stock markets remains fragile following weeks of tumultuous trade as more global central banks continue to tighten. Bernard, CIO of Wincrest Capital, said that he does not believe the world economy is in danger of slowing down. However, he believes we are slowing. As a result, the opportunity for attractive investments right now is mostly on the short side.
Li Keqiang’s Announce on Wednesday (May 25, 2022
- Australian stocks fell 0.47 percent, while Japan’s Nikkei market index fell 0.13 percent after early advances.
- The Kospi in Seoul rose 0.25 percent after the central bank’s rate announcement met expectations.
- The declines in Asia contrast with a more cheerful tone on Wall Street. The Dow Jones Industrial Average climbed 0.6 percent, the S& P 500 gained 0.95 percent, and the Nasdaq Composite gained 1.51 percent.
- The dollar was little changed in Asia trade after surging on Wednesday (May 25, 2022) in response to the Fed minutes. It remained unchanged versus the yen at 127.27, while the euro increased 0.11 percent to 1.0692 percent.
Nevertheless, the interest rate hikes of the Fed are very important to the world’s economy. Not only Asian stocks investors should always pay attention to the Fed’s meeting report, but also all of the investors. It is a good assistant in investment.
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