Asia shares relieved by Powell pick, await US jobs test
Investors gave a guarded reception to Republican plans for massive US tax cuts, while welcoming the appointment of a centrist at helm of the Fed
Asian share markets edged higher on Friday as investors gave a guarded reception to Republican plans for massive US tax cuts, while welcoming the appointment of a centrist at the helm of the Federal Reserve.
Apple’s stock reached new heights after it forecast holiday sales would beat market expectations, a likely positive for its many suppliers scattered across Asia.
A holiday in Japan kept volumes light, while investors observed the usual caution ahead of the US payrolls report, which is expected to show a big bounce back from September’s hurricane-hit result.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.14%, to near its highest since late 2007. Australia’s main index firmed 0.5%, while South Korea added 0.3%.
News that Federal Reserve Governor Jerome Powell would be the new head of the US central bank was well flagged, but still something of a relief.
“He is seen as very much the continuity candidate, he hasn’t dissented in his time as a Fed Governor and his thinking is seen as very much allied to the status quo data-driven style at the Fed,” said David de Garis, a director of economics at NAB.
In Washington, House Republicans finally unveiled long-delayed plans for deep tax cuts that President Donald Trump had promised, setting off a frantic race in Congress to give him his first major legislative victory.
Passage of legislation that mainly favors corporations and the wealthy was far from certain, and some business groups quickly came out against it.
“The tax package will undergo several re-writes and given the contentious debate on day one the final version is likely to be delayed and will be smaller in scope,” said Richard Franulovich, an economist at Westpac. “The market reaction to the tax plan details has been equally lukewarm.”