Asian equities recovered from a one-year low
US stocks reversed early gains and tumbled overnight after the Federal Reserve Chairman Jerome Powell said the central bank will discuss speeding up the bond-buying taper at the upcoming meeting due in two weeks. Also, the markets have been weighted by risks associated with the new Covid variant that has now been found in more than a dozen countries. As such, the Dow Jones plunged by 1.86%, the tech-heavy Nasdaq dipped 1.55%, and the S&P 500 shed nearly 2%
Asian equities recovered from a one-year low on Wednesday to stage a technical bounce after a strong sell-off amid virus-related fears. China’s Shanghai Composite edged 0.36% higher despite the data showing the Caixin manufacturing PMI for November arrived at 49.9 versus 50.5 expected and 50.6 previously. In Japan, capital spending grew 1.2% year-on-year in the third quarter, pushing the Nikkei 225 0.72% higher.
Following suit, European stocks started a new month on a more positive footing as omicron fears have ebbed somehow for the time being. US stock index futures are also keeping more positive, with S&P 500 futures up nearly 1% in early pre-market trade while the pan -European Stoxx 600 adding 0.8%. The sentiment is helped by a relatively strong recovery in the oil market. After a plunge to August lows around $67.50, Brent crude climbed to the $72 figure on Wednesday.
In currencies, the dollar derived some support from a hawkish tone from Powell. The greenback looks steady on the first trading day of December following the recent decline. As such, the EURUSD pair encountered resistance represented by the descending 20-DMA around 1.1380 on Tuesday and has been struggling to regain the upside bias since then. The immediate barrier now arrives at 1.1360. A decisive break above this hurdle would pave the way to further recovery in the short term.