* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Asia aided as strong retail earnings lift Wall St
* Fed minutes show division on rate cuts, yields rise
* Trump says no longer looking at tax cuts
* PMI surveys, ECB minutes due later Thursday
By Wayne Cole
SYDNEY, Aug 22 (Reuters) - Asian shares edged ahead on
Thursday after Wall Street got a boost from strong retail
results, while bonds retreated as U.S. policy makers sounded
conflicted on whether to cut interest rates as sharply as
markets were wagering.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS inched up 0.1%, continuing the see-saw pattern
of recent sessions.
Japan's Nikkei .N225 added 0.4% and Australian shares
.AXJO 0.3%, while E-Mini futures for the S&P 500 ESc1 rose
0.2%.
On Wall Street, the Dow .DJI had gained 0.93%, while the
S&P 500 .SPX rose 0.82% and the Nasdaq .IXIC 0.90%. .N
The bounce was led by retailers, with Target Corp (NYSE:TGT) TGT.N
surging 20% and Lowe's Cos Inc LOW.N 10% after upbeat results.
Minutes of the Federal Reserve's July meeting showed
policymakers were deeply divided over whether to cut interest
rates, but were united in wanting to signal they were not on a
preset path to more easing. Indeed, while a "couple" of Fed members favoured a deeper
cut of half a point, "several" favoured no change at all.
That reluctance did not seem to gel with the market's
aggressive pricing for over 100 basis points of easing by the
end of 2020. FEDWATCH
Treasuries were sold in response and two-year yields
US2YT=RR rose to 1.59% and away from last week's low of
1.467%. US/
"The key message from the Fed minutes is that the 25
basis-point cut in July was just a calibration, a mid cycle
adjustment and not the start of a new easing cycle," said
Rodrigo Catril, a senior FX strategist at NAB.
Hopes for U.S. fiscal stimulus also got a knock when
President Donald Trump reversed course and said he was not
looking at cutting payroll taxes. POWELL
Much now depends on how dovish Fed Chair Jerome Powell
chooses to be in his Jackson Hole speech on Friday.
"The most sensitive comments will revolve around whether
Powell is willing to reaffirm a view that the easing cycle is a
"mid-cycle adjustment" or align more closely to market
thinking," said Alan Ruskin, macro strategist at Deutsche Bank (DE:DBKGn).
"If he sticks to the old language as is most likely, it
would affirm that he is still confident that the strength of
consumption, in combination with modest Fed easing, will be
sufficient to keep the recovery broadly on track."
That would be more hawkish than expected and would likely
lift the dollar further, he said.
The dollar had already bounced overnight, rising to 98.263
on a basket of currencies .DXY from a low of 97.948. It also
reached 106.57 yen JPY= from a trough of 106.21.
The euro edged back to $1.1089 EUR= from a top of $1.1107,
not helped by a gloomy economic outlook from Germany's finance
ministry. A range of manufacturing surveys from across the globe are
due later on Thursday and risks are they will show a further
slowdown in activity, especially in Europe.
Also due are minutes from the European Central Bank's last
policy meeting and markets are looking for more detail on
exactly when and how aggressively it might ease policy.
In commodity markets, spot gold was steady at $1,502.53
XAU= .
Oil prices firmed after U.S. government data showed a
drawdown in domestic crude stocks. O/R
Brent crude LCOc1 futures rose 25 cents to $60.55, while
U.S. crude CLc1 gained 34 cents to $56.02 a barrel.
Asia stock markets https://tmsnrt.rs/2zpUAr4
Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
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(Editing by Shri Navaratnam)