Friday, December 4, 2020
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Asia stocks ease from highs, bonds count on Fed support

DM Monitoring

SYDNEY: Asian shares drifted off all-time highs on Thursday as widening COVID-19 restrictions in the United states weighed on Wall Street, while bonds were underpinned by speculation the Federal Reserve would have to respond with yet more easing.
Japan also reported record news cases as Tokyo raised its pandemic alert to the highest level, shoving the Nikkei .N225 down 0.8% and away from a 29-year closing top.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.6%, off their historic high. Chinese blue chips .CSI300 added 0.4% as President Xi Jinping vowed to cut tariffs and expand imports of high-quality goods and services.
E-Mini futures for the S&P 500 ESc1 steadied after Wall Street took a late dip on Wednesday. The Dow .DJI ended down 1.16%, while the S&P 500 .SPX lost 1.16% and the Nasdaq .IXIC 0.82%.
Pfizer Inc PFE.N shares had gained after the drugmaker said its COVID-19 vaccine was 95% effective and it would apply for emergency U.S. authorization within days.
Pfizer’s announcement came on the heels of a similar report from Moderna Inc MRNA.O.
Yet, the U.S. death toll still neared a world record of a quarter million as government officials in dozens of states weighed or implemented shutdown measures.
New York closed its schools on Wednesday, while Minnesota ordered bars and restaurants to cease in-door dining.
“The vaccines news are a positive medium-term impulse for the global economic outlook and investors are trying to weigh that against the prospect of an imminent stalling of the European and U.S. recovery amid the prospect of extensions of current lockdown measures,” said Rodrigo Catril, a senior FX strategist at NAB.
FORCING THE FED
The drag from new U.S. restrictions was only amplified by the total lack of progress on a fiscal stimulus bill, fuelling speculation the Federal Reserve would have to expand its asset-buying campaign at a December policy meeting.

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