Morning Bid: Fed eyes pause, market bets on pivot

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A look at the day ahead in Asian markets from Jamie McGeever.

Australian trade figures for March and final reading of China's manufacturing PMI for April are the indicators most likely to give local markets a steer on Thursday, while theThe performance of U.S. regional banks on Wednesday is telling. They rose as much as 3% in early trade, recouping some of the previous two days' heavy losses. Booming private sector U.S. jobs data also soothed hard landing or recession fears.

They remained in positive territory after the Fed's policy statement strongly suggested a pause is imminent but quickly retreated as Fed Chair Jerome Powell struck a cautious tone in his press conference.lost between 0.4% and 0.8%, short-dated Treasury yields plunged, and the dollar fell.amongst FX major currencies was against the yen, which surged around 1% for its best day in six weeks. The Japanese currency appears to be rediscovering some of its famed safe-haven status.

Markets are simply not buying Powell's insistence that this time really might be different and the United States can avoid recession after the most aggressive tightening campaign in 40 years - they are pricing in 75 bps of Fed easing this year, the two-year U.S.

The Hong Kong Monetary Authority has been forced to intervene to defend the HK dollar's peg, and on Wednesday local interbank rates shot higher. With the ECB also set to raise rates on Thursday - will it be 25 or 50 bps? - it's shaping up to be a rocky start across Asian markets.- China manufacturing PMI

 

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