Asian shares, bonds surge as Fed seen decisively dovish

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Asian shares, bonds surge as Fed seen decisively dovish

On Monday, the 18th of March 2019, the Asian shares rose strongly, while Japan’s Nikkei 225 had eased Friday’s loss, and gained 0.87 percent so far. Besides, Asian shares of emerging markets had also risen on hopes of a dovish Fed during its policy meeting scheduled to be held later this week.

MSCI’s broadest index of Asia-Pacific shares outside Japan surged by 0.6 percent so far, while Shanghai’s Blue Chips rose 1.6 percent, after Chinese Central bank had told last Saturday (March 16th) that the Chinese government would keep injecting stimulus to avert a contracting economy which recently had suffered a three-decade-low industrial production data, even it would cost the economy an interest cut apart from instilling low-interest long-term debts.

Expressing optimism over another upcoming dovish FOMC minute later this week, A chief economist at National Australia Bank, Alan Oster said, “Long-term bond yields remain noticeably lower across a wide range of countries.

Markets are pricing in little or no chance of a rate hike by the major central banks this year, outside of the Bank of England. The Fed is indicating that it will be patient and we don’t expect any rate hikes this year”.

Concomitantly, the US dollar kept falling against a gauge of six major currencies, as Friday’s data showed a steep contraction in US manufacturing output and factory activity in New York had hit a two-yearly low in February, while concerns of a downbeat Fed had prefixed further penetrations into American dollar, residing at 95.89 against a basket of six majors on average.

Besides, the US Dollar index (DXY) would likely to fall again today after posting its biggest intra-week fall in four months last week.