Morning Report

Asian shares edge up, ECB meeting in focus

Asian shares rose on Thursday after Wall Street managed to end higher, but gains were capped by political uncertainty in the United States and worries about weakening global economic growth.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.2 percent. It has gained 3.8 percent so far this month.

Australian shares were 0.1 percent higher while Japan’s Nikkei lost more than 0.3 percent in early trade.

On Wall Street, all three major U.S. equity indexes closed in positive territory, with the Dow Jones Industrial Average booking the largest gains on upbeat quarterly results from International Business Machines. The S&P 500 .gained 0.22 percent.

CENTRAL BANK MEETINGS

Investors’ focus also turned to the European Central Bank. The ECB is widely expected to stay on hold at its first monetary policy meeting of 2019 that ends later on Thursday, but may acknowledge a sharp slowdown in growth, raising the prospect that any further policy normalization could be delayed.

The ECB’s meeting will come a day after the Bank of Japan cut its inflation forecasts on Wednesday but maintained its massive stimulus program, with Governor Haruhiko Kuroda warning of growing risks to the economy from trade protectionism and faltering global demand.

CURRENCY

In currency markets, the dollar last was a shade weaker against the yen , changing hands at 109.55 yen per dollar.

The dollar hit a year-to-date high of 110.00 yen against the Japanese currency after the BOJ kept its policy on hold the previous day. The euro was basically flat at $1.1384. It has lost more than 1.5 percent after climbing to a three-month high of $1.1570 on Jan. 10.

Sterling hit a fresh 11-week high against the dollar, rising to $1.3084, on bets that a no-deal Brexit can be avoided if parliament exerts greater control over the process.

Solid Australian jobs data for December helped support the Australian dollar, which rose 0.2 percent to $0.7158. The Aussie is up 1.4 percent against the greenback so far this year.

BONDS

The yield on benchmark 10-year Treasury notes fell to 2.744 percent compared with its U.S. close of 2.755 percent on Wednesday.

OIL

In commodity markets, oil prices extended their slide from Wednesday when they slipped as the EU sought to circumvent U.S. trade sanctions against Iran, and on weaker U.S. gasoline prices.

U..S. West Texas Intermediate (WTI) crude futures fell 20 cents, or 0.38 percent, to $52.42,

Source : Reuters

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