Asian stocks advance, caution prevails ahead of Jackson Hole

HONG KONG, Aug.27 (Reuters) – Asian stocks were set for their best week since February on Friday as Chinese markets applauded an explosion in central bank liquidity although wider enthusiasm was capped before what could be a crucial speech from the head of the US central bank.

U.S. equity futures rose 0.2% in Asian hours, suggesting some optimism after sentiment was shaken Thursday by a deadly attack in Afghanistan, and after more hawkish Federal Reserve policymakers demanded the end of the stimulus measures.

The largest MSCI index of Asia-Pacific ex-Japan stocks (.MIAPJ0000PUS) rose 0.17%, up 3.78% for the week, which would be its best week since February, while the Nikkei Japanese (.N225) lost 0.46%.

Chinese blue chips (.CSI300) rose 0.45%, a reversal of recent weeks in which mainland stocks weighed on the region, as investors were reassured by the largest weekly cash injection of the central bank in the banking system since February. The Hong Kong benchmark (.HSI) rose 0.15%.

Recent crackdowns have shaken up sectors from real estate to tech and wiped half a trillion dollars from Chinese markets last week alone. Read more

“A-shares (Chinese onshore equities) and Hong Kong are on pause after some pretty extreme moves over the past two weeks,” said Qi Wang, CEO of MegaTrust Investment (HK).

“Investors are grappling with regulatory risk over continued strong earnings.”

ZhongAn Online P&C Insurance Co Ltd (6060.HK) rose 6.3% after posting strong results, for example.

The Australian (.AXJO) and Korean (.KS11) benchmarks traded on either side of the dish.

At the start of European trading, pan-regional Euro Stoxx 50 futures were down 0.06%, but FTSE futures were up 0.08%. But the main goal of the day is yet to come.

Fed Chairman Jerome Powell is scheduled to speak at 2:00 p.m. GMT at the Kansas City Fed Central Bank Conference, an event normally held in Jackson Hole, Wyoming, which has been used by the bank in the past. to provide guidance on future policy.

RBC analysts said in a note that while much of the summer had been spent waiting for the event, there was “skepticism that the Fed will provide more specific information on a timeline… amid an increase in Delta variant COVID cases.

Ahead of the speech, public remarks by the Fed’s most hawkish speakers on Thursday urging the central bank to start cutting bond purchases weighed on Wall Street, which closed slightly lower, ending a string of highs historical. Read more

The Dow Jones Industrial Average (.DJI) fell 0.54%, the S&P 500 (.SPX) fell 0.58%, and the Nasdaq Composite (.IXIC) fell 0.64%.

Dallas Fed Chairman Robert Kaplan said he believed the economic recovery justified reducing asset purchases to start around October. Earlier, St. Louis Fed Chairman James Bullard said the central bank was “regrouping” around a plan to start shrinking. Read more

The dollar and US yields were little moved on Friday before Powell’s speech.

The benchmark 10-year Treasury yield was 1.3441%, down from a two-week high of 1.375% set the day before, but barely changed from the US close.

Gold rose 0.53% to $ 1,801.55 an ounce as some investors sought safety ahead of the speech.

U.S. crude rose 1.39% to $ 68.36 a barrel, Brent crude rose 1.46% to $ 72.03 a barrel, as energy companies began halting production in the Gulf from Mexico ahead of a potential hurricane this weekend.

Editing by Stephen Coates and Sam Holmes

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