Dire weather around the upcoming Lunar New Year holiday doesn’t help. Heavy fog suspended ships travelling through the Qongzhou Strait off China’s Guangdong province, while snow and freezing rain across many parts of the country is expected to strain travel for millions over the next few days.
And as China stocks fall anew, official action to stabilise yuan was stepped up – something many investors say merely ends up forcing a choice over currency depreciation or further internal asset price deflation.
As has been the case all year, rising Japanese stocks are a stark regional contrast and the Nikkei index rose 0.6% on Wednesday, notched its best January in 26 years after shaking off early chip-led declines.
Back on Wall St, the Fed decision and latest private sector jobs update will dominate today alongside the earnings season.
The Fed isn’t expected to change rates today but any signals on how soon its well-flagged interest rate cuts this year will start will be lapped up.
Underlined by a 0.6% International Monetary Fund forecast upgrade for U.S. growth this year to 2.1%, the U.S. economy continues to impress even as inflation subsides.
On Tuesday, news of an unexpected rise in U.S. job openings and fresh boost to consumer confidence continue to underline the rude health of the U.S. labor market and household demand.
With one eye on the details of the U.S. Treasury’s quarterly refunding schedule and auction sizes due out later, 10-year Treasury yields slipped back below 4% for the first time in two weeks. Crude oil prices also fell back and the dollar was firmer.
