The decline in Asian stocks, the dollar holds firm after Powell’s appointment by Reuters

Author: Kane Wu

HONG KONG (Reuters) – Asian stocks were mostly lower on Tuesday, following a retreat on Wall Street, with President Joe Biden electing Federal Reserve Chairman Jerome Powell to head the central bank for a second term, bolstering hopes that the U.S. will soon reduce stimulus.

The MSCI gauge for equities outside of Asia Pacific fell 0.49%, while the benchmark CSI300 Indices for Hong Kong and China opened 1.1% and 0.2% lower, respectively.

Australia gained 0.55%, driven by mining and energy stocks. Japanese markets were closed on public holidays.

Dangerous assets have shaken up again in recent sessions, amid rising numbers and new limitations in Europe’s COVID-19 cases, allaying hopes of reviving consumption and growth more quickly around the world.

German Chancellor Merkel said the latest rise is the worst the country has experienced so far, while Austria introduced a new blockade on Monday.

Tonight on Wall Street, and away from all-time highs, President Biden left Powell to continue as Fed chairman and Lael Brainard, another top candidate for the job, after touching him as vice president.

“The USD seems ready to hold on to Powell’s post-appointment gains because it leaves room for the markets to tie in with the idea of ​​a faster pace,” analysts at TD Securities said in a note.

ANZ bank analysts agreed, saying in a note to customers that Powell’s news “will increase expectations and rates will begin to rise from June 2022.”

The U.S. rate hikes were well supported near the 16-month high. The greenback was also near the 4-1 / 2-year high on Tuesday against the yen.

Powell’s current tenure, which has focused on inflation in terms of job creation, has been positive for risky assets, with the S&P gaining 69.7% since its appointment.

U.S. Treasury yields rose on two-year notes, which typically coincide with interest rate expectations. It reached its highest level since early March 2020.

In commodities, it rose 0.19% to $ 1,808.4 an ounce at 0226 GMT, reducing losses on Monday. Gold prices were under pressure as Powell’s appointment pushed the central bank’s hopes of reducing economic support.

Oil prices were up again after a brief rebound the day before as a result of reports that OPEC + may adjust its plans to boost oil production if large consumers release crude from their reserves or if the coronavirus pandemic reduces demand.

It fell 0.21% to $ 79.53 a barrel and fell 0.5% to $ 76.38 a barrel for 0226 GMT.

The U.S. Department of Energy is expected to announce an oil loan from the Strategic Oil Reserve on Tuesday, in coordination with other countries, Reuters reported earlier.