- Asian equities rose on Thursday as the Federal Reserve delayed monetary tightening and China's central bank reduced a key lending rate to help the country's faltering economy.
- Hong Kong's benchmark index rose about 1%, while Japanese stocks rose slightly. Australian shares pared gains and the country's sovereign yield curve inverted after the RBA bolstered the argument for further interest rate hikes.
- The dollar climbed, while the offshore yuan fell more and the yen fell to its lowest level since November. Treasury yields increased somewhat.
- The S&P 500 rose 0.1% on Wednesday after Fed's Powell stated that virtually all Fed officials expected interest rates to rise slightly higher in 2023. The Nasdaq 100 gained 0.7%, extending its year-to-date gain to 37%.
- With the Fed's pause and hawkish stance largely expected, much of the focus in the Asian trade session is on China. The PBoC's reduction in the rate on its medium-term lending facility sets the door for banks to drop lending rates next week.
- The decision by the PBoC is also part of larger stimulus initiatives to support real estate and domestic demand. Retail sales declined more than predicted in May, adding to concerns about further weakening in China. Industrial production was also down, but it matched expectations.
