NEW YORK (Reuters) – Asian stocks looked set to rise on Wednesday, recovering from a strong liquidation on Tuesday, while Australian stocks opened weaker after Tuesday’s holiday.
Bullish markets in Europe and a slight decline from record US stock levels overnight suggested that investors were cautious about possible obstacles to a US stimulus plan and ahead of a Federal Reserve policy announcement.
The eyes are on the Australian inflation figures to be released on Wednesday, said Steven Daghlian, a market analyst at CommSec in Sydney, who noted that both stocks and the Australian dollar are “in shambles”. The Australian’s stock reached an 11-month high on Monday, “close to pre-COVID levels,” he said.
The US Federal Reserve is expected to announce the results at its two-day policy meeting on Wednesday. Analysts expect the Fed to maintain its dovish tone to help accelerate the economic recovery.
US stimulus talks are in focus, with US Senate majority leader Chuck Schumer saying that Democrats will move ahead with President Joe Biden’s coronavirus relief plan without Republican support, if necessary.
European equities rose on Tuesday with strong gains from wealth manager UBS and auto parts maker Autoliv added to a series of upbeat corporate upgrades, while the International Monetary Fund raised its global growth forecast in 2021.
US Treasury yields fell mainly in hectic trading overnight, after hitting three-week lows at the long end of the curve, with investors remaining cautious about the size of a proposed US stimulus package.
The 10-year benchmark grades were yielding 1.033%, compared to 1.04% on Tuesday night.
Australian S & P / ASX 200 futures lost 0.25% in early trading.
Japan’s Nikkei 225 futures were up 0.07%, while the Nikkei 225 index closed the night session at%. Hong Kong’s Hang Seng index futures were up 0.68%.
E-mini futures for the S&P 500 were up 0.21%.
The Australian dollar was up 0.05% against the US dollar, at $ 0.775.
The US dollar fell across the board as traders showed a preference for riskier currencies. The dollar index fell 0.194%, with the euro rising 0.02%, to $ 1.2162.
The Japanese yen weakened 0.01% against the US dollar to 103.61 per dollar, while the British pound was trading at $ 1.3735, up 0.01% on the day.
Reporting by Alwyn Scott; Editing by Lisa Shumaker