GLOBAL MARKETS – Asian equities drop from highs, bonds count on Fed support

* Asian equity markets:

* Asia ex-Japan out of record after the withdrawal of Wall St

* Tokyo raises pandemic alert level, Nikkei slips

* Economic restrictions in the United States suggest greater Fed action

SYDNEY, Nov. 19 (Reuters) – Asian equities slipped from all-time highs on Thursday due to widening U.S. COVID-19 restrictions weighing on Wall Street, while bonds were buoyed by speculation that the Federal Reserve would have to respond with a further loosening.

Japan also reported record news cases as Tokyo raised its pandemic alarm to the highest level, pushing the Nikkei down 0.8% and away from a 29-year close high.

The broader MSCI index of Asia Pacific equities outside of Japan fell 0.6% from an all-time high. China’s blue chips gained 0.4% after President Xi Jinping vowed to cut tariffs and expand imports of high-quality goods and services.

E-Mini futures for the S&P 500 stabilized after Wall Street fell late on Wednesday. The Dow closed down 1.16%, while the S&P 500 lost 1.16% and the Nasdaq 0.82%.

Shares in Pfizer Inc had gained after the drug maker said its COVID-19 vaccine was 95% effective and would require US emergency clearance within days.

Pfizer’s announcement came in the wake of a similar report from Moderna Inc.

However, the death toll in the United States still came close to a world record of a quarter of a million, as government officials from dozens of states weighed or implemented shutdown measures.

New York closed its schools on Wednesday, while Minnesota ordered bars and restaurants to stop eating al fresco.

“The vaccine news is a medium-term positive boost to the global economic outlook and investors are trying to weigh it with the prospect of an imminent halt to the European and US recovery amid the prospect of extensions to current lockdown measures,” he said. said Rodrigo Catril, a senior FX strategist at NAB.


The brake from the new US restrictions was only amplified by the total lack of progress on a fiscal stimulus bill, fueling speculation that the Federal Reserve should expand its asset-buying campaign at a December policy meeting.

Two senior Fed officials offered a chance to do more on Wednesday.

The possibility of further easing helped push 10-year Treasury yields down to 0.85% and away from an eight-month high of 0.975% hit last week.

It also weighed on the dollar, which slid for five straight sessions before stabilizing a bit on Thursday. Against a basket of currencies it was last at 92.477, still close to recent lows of 92.129.

The dollar also slowed slowly against the Japanese yen, reaching 103.72 and was approaching its eight-month low of 103.16.

The euro had pandemic troubles just as blockages spread across the continent, keeping it capped at $ 1.1844 and below the recent high of $ 1.1919.

The pound fell to $ 1.3230 as Brexit talks dragged on. The Times reported that European leaders would ask the European Commission to publish no-deal plans as the deadline approaches.

Bitcoin, sometimes considered a safe haven or at least a hedge against inflation, has risen to over $ 18,000 for the first time in nearly three years. Last time it was $ 17,808.

All the talk of the policy easing put a low below gold prices, leaving the metal stable at $ 1,868 per ounce.

Oil prices fell as virus restrictions hit fuel demand in Europe and the United States

US crude fell 35 cents to $ 41.47 a barrel, while Brent crude futures lost 23 cents to $ 44.11.

Additional reporting by Chibuike Oguh in New York; Montage by Sam Holmes


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