Asian Equities Head Higher After Powell Rate Cut Comments

Regional Asian equities are higher today, largely on the back of comments from Jermone Powell reaffirming his view of rates cuts later this year, he mentioned the Fed would take a wait-and-see approach before reducing borrowing costs. However, his views that recent inflation figures did not “materially change” the overall picture offered support for risk assets. Elsewhere China & Taiwan will be out for the rest of the week, while Hong Kong is out today. Japan is the top performing market in the region today, while South Korean equities saw their first net outflow by foreign investors in 10 trading sessions on Wednesday and Philippines revised 2023 GDP growth to 5.5% from 6% and cut the 2024 GDP growth rate to 6-7%.

• In Japan equities have surged higher on Thursday as comments from Powell where he reaffirmed his view that the Fed will start to cut rates later this year, while yields were lower on the back of weaker than expected US ISM data. It is a quiet day for economic data for Japan, while there was a 30y JGB auction which saw mixed demand metrics The Topix Bank Index leads the way higher today, up 1.89% and up 4.10% from the lows from yesterday morning, the wider Topix Index is up 1.43%, while the Nikkei 225 is back above the 40,000 mark and up 1.57%.
• South Korean equities are higher led by chip stocks after comments from Powell. Samsung, SK Hynix and LG Energy are the biggest individual contributors to the gains in the Kospi. Wednesday marked the first day in 10 trading session where foreign investors sold SK equities, although just $28m. Shortly, South Korean Finance Minister will meet with foreign investors to promote the "Value-up" program. Currently the Kospi is up 1.10%.
• Taiwanese equities markets will be closed for the rest of the week for Tomb Sweeping Day.
• Australian equities opened higher and have since traded in a very tight trading range, the ASX200 bounced off the 20-day EMA and now trade up 0.50%. Earlier, Judo Bank PMI composite was 53.3 vs 52.4 prior, services PMI was 54.4 vs 53.5 prior, while Building Approvals dropped to -1.9% vs 3.0% expected, although slightly above the revised -2.5% from Jan. Financial are leading the way higher today, while Consumer Staples/Discretionary and Telecom names are underperforming.
• Elsewhere in SEA, New Zealand equities are 0.25% lower, while building permits increased to 14.9% in Feb from -806% in Jan, the ANZ Commodity Price Index fell to -1.3% from 3.5%. Singapore equities are 0.65% higher, Malaysian equities are 0.93% higher, Indonesian equities are up 0.90% while the IDR hovers near four year lows, Philippines equities are lower today down 0.43% after cutting 2024 GDP growth to 6%-7% from 6.5%-7.5%