Stocks ignore virus worries; The ECB in focus By Reuters

By Tom Westbrook

SINGAPORE (Reuters) – Asian stock markets were heading for their best day in two months on Thursday, although growth-sensitive currencies struggled to recover, leaving lingering doubts about the recovery as investors were looking to the European Central Bank for their next signal.

The largest MSCI index for Asia-Pacific stocks outside of Japan was last up just over 1%, its biggest daily jump since late May, with Seoul’s green markets at Sydney.

Japanese markets were closed for a public holiday.

The positive mood in Asia followed a rebound on Wall Street, although it remained stable during the session, suggesting that the rally’s momentum is waning. Futures contracts rose 0.1% and Euro STOXX 50 futures contracts rose 0.4%.

There has been no obvious catalyst for the recent rally in equities, or for the pullback on Friday and Monday, although a study on Wednesday showed both Pfizer The vaccines (NYSE 🙂 and AstraZeneca (NASDAQ 🙂 were effective against the variant of the Delta coronavirus.

“Every now and then, investors look for reasons to take a profit and that’s what we’ve seen,” said Jun Bei Liu, portfolio manager at Tribeca Investment Partners in Sydney.

“The market suddenly got worried about the Delta variant and how it might affect the path to recovery,” she said. “But what we compared to 12 months ago are quite a few viable vaccines… eventually we’ll come out of them and we’re much closer to the end than 12 months ago.”

Hong Kong led Asia’s gains with HSBC and Standard Chartered (OTC 🙂 banks from multi-month lows to lift 1.7%. Heavily indebted Chinese real estate developer Evergrande jumped around 9% after saying it resolved legal disputes with a lender.

Yet elsewhere, risk-sensitive assets struggled, with the Australian and New Zealand dollars weighed down by lockdowns as the US dollar hovered near year-highs against the euro.

The sat at 92.770, after Wednesday’s three-month high of 93.194 and the euro was held stable just above recent lows of $ 1.1796. The yen, a safe haven, suffered small losses at all levels.

ON LAGARDE WATCH

With a bare data schedule on Thursday, except for unemployment claims in the United States, the European Central Bank’s policy decision, expected at 11:45 a.m. GMT, and President Christine Lagarde’s subsequent press conference are at center of market concerns.

Lagarde instilled in traders a sense of anticipation after signaling an adjustment in the bank’s key rates to reflect a new, more flexible inflation targeting strategy.

Any changes in the pace or outlook for bond purchases will also be closely scrutinized.

“Overall, we expect the message to be accommodating and we are tactically short of the euro (against the yen) for the meeting,” said Adam Cole, chief currency strategist at RBC Capital Markets.

Rate markets have slowed in Asia, with trade thinned by the Tokyo holiday, leaving the benchmark 10-year US Treasury yield near Wednesday’s highs of 1.2884%.

Investors have their eye on a partisan showdown in Washington over the U.S. debt ceiling, as the U.S. Treasury is expected to exhaust its borrowing power in October, which has put upward pressure on short-term rates in the U.S. overnight.

In commodities markets, oil held on to most of Wednesday’s sharp price hike, its biggest single-day gain in three months. Futures were 0.4% lower to $ 71.94 a barrel, but gained more than 4% on Wednesday.

Gold was stable at $ 1,800 an ounce and cryptocurrencies were firm after rebounding from lows when Tesla boss (NASDAQ 🙂 Elon Musk said the automaker would likely start accepting bitcoin payments again. after due diligence on its energy consumption.

last purchase of $ 31,928.