Asian shares rise to 3-week high ahead of Powell’s testimony

Asian shares extended their recovery on Tuesday, hitting a three-week high as U.S. borrowing costs eased ahead of Federal Reserve Chairman Jerome Powell’s highly-anticipated first congressional testimony later in the day. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3 percent, building on its bounce from a two-month low touched on Feb 9. Japan’s Nikkei rose 1.0 percent to three-week highs. On Wall Street, the S&P 500 advanced 1.18 percent on Monday helped by fall in U.S. bond yields. The 10-year U.S. Treasuries yield eased to 2.864 percent, dropping further from its four-year peak of 2.957 percent touched on Feb 21, driven by month-end buying as well as position adjustments ahead of Powell’s testimony. Powell’s debut appearance is seen as critical for financial markets at a time when many investors are nervous about the Fed’s policy normalisation following years of stimulus after the financial crisis almost a decade ago. Many expect the Fed to raise interest rates three to four times this year, as policy makers look to prevent an overheating of the economy especially as growth is set to get another boost from the Trump administration’s tax cuts and spending plans. Yet, investors are worried rising dollar funding costs could bode ill for potential borrowers, including U.S. home buyers and some emerging market companies. MSCI’s gauge of equity market performance in 47 countries gained 0.82 percent on Monday, rising above its Feb 16 high to hit it a three week top. Still, it is down 2.4 percent so… [Read full story]

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