Asian Stocks Rise, Oil Strengthens and Federal Reserve Revises Rate Hike Outlook
This week saw the price of oil rebound and peak at more US$40, a recent Fed announcement toning down their rate hike predictions for the year 2016 and a rally in Asian stock markets.
Central, Hong Kong, March 20, 2016 (Newswire.com) - The rest of Asia, excluding Japan whose shares opened lower due to a resurgent yen, saw stocks rise to their highest point for the year so far due to the gains made by crude oil which saw prices reach above US$40 a barrel and with the dollar holding its declines after the softening of the rate outlook given by the Federal Reserve.
A worldwide wave of volatility sent the MSCI Asia Pacific stock market measure to record lows not seen since 2011 but has now climbed back to former levels. With U.S. crude oil reaching its peak so far this year at more than US$40 a barrel where transversely Japan’s Topix index fell for its fourth straight day whereas there were extended gains by emerging market currencies.
"... after enduring a considerable amount of volatility we can now see a more stable market outlook for the next 2 quarters and beyond."
Michael Bachmann, Senior Analyst, Joyo Financial Ltd.
“This week the Federal Reserve toned down its stance on expected rate hikes for the year in 2016 and in the process sparked an equity revival which saw them move into firmer territory. Five weeks ago oil was sitting at a12 year low and has since made a 53 percent recovery strengthening a resurgence in risk assets and improving traders’ previously dull outlooks seen at the start of this year,” said Michael Bachmann, senior analyst at Joyo Financial Ltd.
Policy makers in Japan and the Euro zone implemented stimulus plans resulted in producing mixed impacts on the markets, with the Federal Reserves recent outlook statements resulting in rate cuts in Norway and Indonesia.
“The Federal Reserves recent outlook announcement has produced a certain level of excitement and this has stimulated markets and this excitement has yet to simmer down” Michael Bachmann senior analyst at Joyo Financial Ltd., in a communication to clients, “It’s clear to me and I’m sure it is to others that their backtracking is indicative of a more cautious sentiment on the Fed’s part but after enduring a considerable amount of volatility we can now see a more stable market outlook for the next 2 quarters and beyond. We look forward with anticipation to the other nations in the regional bloc releasing their statements on their balance of payments, property prices, retail sales and foreign reserves.”