Asian Stock Market: Nikkei 225, ASX 200 cheer risk-on mood despite hawkish Fed bets

• Asia-Pacific markets remain firmer outside China as trade, macro headlines favor risk-on mood.
• Aussie trade deal, data joins optimism surrounding Japan to underpin bullish bias.
• Fed bets remain firmer even as NY Fed’s Williams doubts rate hike concerns.
• Softer China inflation data, hopes of firmer growth in Asia favor optimists.

Market sentiment in the Asia-Pacific zone appears mostly firmer on Tuesday as traders cheer upbeat macros and hopes of cordial foreign trade relations in the region. While portraying the mood, the MSCI’s index of Asia-Pacific shares outside Japan prints mild gains to extend the previous day’s rebound from the lowest levels in a fortnight.

That said, the receding odds of a sudden shift in the Bank of Japan (BoJ) monetary policy and talks that the legendary investor Warren Buffet may invest in Tokyo seem to have propelled Nikkei 225, up 1.35% intraday near 28,010 by the press time.

On the other hand, Australia’s ASX 200 also prints more than 1.0% gain as Aussie Westpac Consumer Confidence for April rallied to the highest levels since June 2022, printing 9.4% figure versus 0.8% expected and 0.0% prior. Further, the National Australia Bank’s (NAB) Business Conditions matched the forecast figure of 16.0, versus 17.0 prior, whereas NAB Business Confidence eased to -1.0 versus 0.0% expected and -4.0% previous readings.

It should be noted that the end of the trade dispute between Australia and China over barley exports also seemed to have favored the equity traders in the Asia-Pacific bloc.

Elsewhere, stocks in China print mild losses as headline inflation numbers for March, namely the Consumer Price Index (CPI) and Producer Price Index (PPI), came in 0.7% YoY and -2.5% YoY versus 1.0% and -1.4% respective priors. However, upbeat headlines from the International Monetary Fund’s (IMF) Managing Director Kristalina Georgieva seem to restrict the losses in China and allow Indian equities to remain firmer. “The global economy is estimated to grow less than 3% in 2023, with India and China expected to account for half of the global growth this year,” said IMF’s Georgieva on Monday.

On a broader front, fresh doubts on the US Federal Reserve’s (Fed) capacity to stay hawkish, backed by downbeat comments from New York Fed John Williams and fears of recession spread by BlackRock, appear to favor the cautious optimism in the market. As a result, the S&P 500 Futures print mild gains around 4,143 at the latest while the US 10-year and two-year Treasury bond yields retreat to 3.40% and 3.97% by the press time.

Alternatively, looming US-China tension and hawkish Fed bets challenge the stock buyers ahead of the top-tier data from the US. That said, a return of the full markets can entertain traders amid a light calendar on Tuesday, except for Eurozone Retail Sales. However, Wednesday’s key US inflation and Fed Minutes will be crucial for investors to watch, not to forget the updates from the Q1 earnings season.

Also read: Forex Today: US Dollar strengthens ahead of US Inflation