Asian markets rose on Wednesday as traders expected policy indications from Beijing during its week-long annual parliament session after a lack of stimulus disappointed investors, while gold and bitcoin fell after reaching record highs.
Before Federal Reserve Chair Jerome Powell's congressional appearance on Wednesday, traders were wary to take big bets. The speech will determine if and when the central bank is ready to decrease interest rates.
A day after Beijing established a largely expected 5% growth target for 2024 at a critical parliament meeting without any stimulus measures, Chinese markets were neutral. The blue-chip CSI 300 Index (.CSI300) fell 0.08%, while Hong Kong's Hang Seng (.HSI) rose 2% after Tuesday's 2.5% drop.
"The 2024 (China) economic targets still show officials are unwilling to quickly reflate the economy due to excessive debt and the weak yuan," said Bank of Singapore chief economist Mansoor Mohi-uddin. Investors seeking policy insights will watch an economy-focused news conference at 0700 GMT on Wednesday, where People's Bank of China and other officials may answer media questions.
MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), opens new tab originally fell before rising 0.46% due to the wait-and-see approach. Wall Street's three major indexes fell more than 1% on Tuesday, with megacap growth giants like Apple (AAPL.O) and the chip sector weighing most on the tech-heavy Nasdaq (.IXIC). S&P 500 e-mini futures climbed 0.09%. Eurostoxx 50 futures are up 0.10%, DAX futures up 0.14%, and FTSE futures up 0.05%.
On Tuesday, the U.S. services sector expanded less and new manufacturing orders fell more than expected. Payrolls data later in the week will be the focus. In Asian hours, benchmark 10-year U.S. Treasury rates stabilized at 4.147% after falling to a one-month low of 4.112% after dismal data.
Traders are watching U.S. economic data and policymaker comments to predict Fed rate cuts. According to CME FedWatch, markets expect the Fed to begin easing in June at 68%. This year, they expect 88 basis points of cutbacks. Powell's congressional appearances starting Wednesday are significant, but analysts expect him to keep to his agenda.
The Treasury extended the Federal Financing Bank's HUD-local housing agency risk-sharing assistance indefinitely. The initiative resumed in 2021, building and renovating 42,000 low-income rental units with $5 billion. Adeyemo expected the extension to add tens of thousands of units over a decade. Federal Financing Bank finances federal agency borrowing and lending.
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