Actions in the Asia-Pacific region rallied hopes for a path to reopen the US economy after the coronavirus pandemic, as investors prepared for what should be the first economic contraction Chinese in four decades.
On Friday morning, Japan’s Topix rose 1.5%, while Australia’s S & P / ASX 200 rose 2.3% and South Korea’s Kospi 2.7%.
Investors were optimistic despite the likelihood of a substantial decline in China’s gross domestic product in the first three months of the year. Economists interviewed by. forecast official data will show a 6.5% contraction due to strict restrictions across the country to stem the spread of Covid-19.
Futures markets signaled a boost for US stocks later today, with the S&P 500 expected to rise 3% due to optimism about the US economy’s interim recovery plans. The guidelines issued by President Donald Trump have recognized that it is up to the governors of each state to determine when to lift restrictions on social displacement.
On Wall Street overnight, the S&P 500 closed up 0.6%, although economic data revealed another spike in unemployment demand in the United States.
Robert Carnell, head of Asia-Pacific research at ING, said that some US states could start easing the blockages as early as May, but warned that the process would probably be slow. “If the markets are betting on a rapid return to normal production conditions, they are far from the mark,” he said.
Investors were also encouraged by a report suggesting that a potential treatment for Gilead’s coronaviruses had shown positive results in a clinical trial. However, it did not include a control group, which, according to the trial physician, made it difficult to draw too many conclusions.
The appetite for riskier assets was reflected in the sovereign debt markets, as falling yields pushed bond prices higher. The 10-year US Treasury yield climbed 0.07 percentage points to 0.6803%.
Oil prices also jumped with Brent crude oil, the international benchmark, up 2.1% to $ 28.68 per barrel. West Texas Intermediate, the US scorer, rose 0.6% to $ 19.99.