Asia equities soar on dovish Yellen

[HONG KONG] Asian markets surged on Thursday, extending a global rally that saw another record on Wall Street after the head of the Federal Reserve indicated it would take a gradual approach to raising US interest rates.

In closely watched testimony to Congress, Janet Yellen said the central bank would keep lifting borrowing costs as long as the world’s top economy showed improvement, taking into account inflation remained below its two percent target.

The remarks lit a fire under equities, with the Dow posting its highest close, on the prospect that money would continue to be cheap for the time being.

Stephen Innes, senior trader at Oanda, said she “unambiguously drew attention to inflation as the critical determinant of Fed rate hikes. Given the market’s tepid inflation expectations, traders quickly repriced an even more cautious rate hike cycle as December odds fell to 50 per cent from around 70 per cent”.

 

Business Times vs AFP

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Stephen Innes

Stephen Innes

Senior Currency Trader and Analyst at OANDA
Stephen has over 25 years of experience in the financial markets and specializes in Asian currencies at OANDA. After having started his trading career with NatWest Bank, he is currently based in Singapore as a Senior Currency Trader and Analyst with OANDA, focusing on the movement of the Aussie Dollar and ASEAN Currencies. Stephen has an extensive trading experience in Interest Rate Futures, Money Markets and Precious Metals. Prior to joining OANDA, he worked with organizations like Cambridge Mercantile, Nat West, Garvin Guy Butler, Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes
Stephen Innes

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