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”.


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Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes