Barclays now sees two Fed cuts this year, says jumbo Fed cuts ’very unlikely’
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* MSCI ex-Japan ticks up, Japan's Nikkei stumbles
* Chinese shares on firm footing on stimulus hopes
* Japan's GDP shrinks at fastest pace in 6 years
* Singapore downgrades growth outlook due to coronavirus
By Swati Pandey
SYDNEY, Feb 17 (Reuters) - Asian shares reversed earlier
losses on Monday and moved back toward a three-week top as
Chinese efforts to cushion the blow from a coronavirus outbreak
cheered investors, although Japanese stocks faltered amid
growing recession risks.
Trading is expected to be light as U.S. stocks and bond
markets will be shut on Monday for a public holiday.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS was a tad firmer at 557.30, not far from last
week's peak of 558.30, which was the highest since late January.
The gains were helped largely by Chinese shares with the
blue-chip index .CSI300 adding 0.4% after the country's
central bank lowered one of its key interest rates and injected
more liquidity into the system. Also whetting risk appetite was an announcement by China's
Finance Minister on Sunday that Beijing would roll out targeted
and phased tax and fee cuts. Fears about the jolt to the world economy from the
coronavirus still lingered though as the number of reported new
cases in China rose to 2,048 as on Sunday from 2,009 the
previous day.
Restrictions were tightened further in Hubei on Sunday with
most vehicles banned from the roads and companies told to stay
shut until further notice.
China's "containment measures suggest that activity is only
likely to normalise by mid-March at best and more likely end
Q1," said Jefferies analyst Sean Darby.
"The question remains over the degree of stimulus to be
required given the country's fiscal position."
Japan's Nikkei .N225 stumbled 0.7% after the country's
economy shrank at the fastest pace in the December quarter since
the second quarter of 2014. The hit to the world's third-largest economy comes amid
fresh concerns about weakness in the current quarter, as the
coronavirus damages output and tourism, stoking fears Japan may
be on the cusp of a recession.
Trade-dependent Singapore downgraded its 2020 economic
growth forecast due to the coronavirus, while China's economy is
also widely expected to take a sharp hit. RUN
Asia's woes have yet to spread elsewhere, with Wall Street
indexes scaling record highs. .N
E-Mini futures for the S&P500 ESc1 were up 0.2% in Asian
trading on Monday.
Talk of a U.S. middle class tax cut and a proposal to
encourage everyday Americans to invest in the equities market
boosted share market sentiment late last week, Betashares chief
economist David Bassanese said.
Bassanese had misgivings about the plan, saying it reminded
him of former U.S. President George Bush encouraging Americans
to buy a home during a housing boom.
"It adds to my suspicion that this decade-long bull market
could eventually end via a blow-off bubble, driven by central
bank persistent low interest rate policy," he said in a note.
Later in the week, flash manufacturing activity data for
February are due for the Eurozone, the United Kingdom and the
United States, which is likely to capture at least some of the
early impact of the viral epidemic.
Action was relatively muted in the currency markets, with
the dollar a tad firmer against the yen at 109.81 JPY= . It was
unchanged on the pound at $1.3047 and a tad weaker on the euro
The risk-sensitive Aussie AUD=D3 , which is also played as
a liquid proxy for the Chinese yuan, ticked up to $0.6723.
That left the dollar index flat at 99.141.
In commodities, gold XAU= inched lower to $1,582.27 an
ounce.
Oil futures slipped with Brent crude LCOc1 down 34 cents
at $56.98 a barrel and U.S. crude off 12 cents at $51.93. O/R
Asia stock markets https://tmsnrt.rs/2zpUAr4
Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
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