(ATF) Hong Kong: Financial market investors rallied as the US presidential transition process was set in motion, calming investors worried about a messy and tumultuous transfer.
US President-elect Joe Biden’s cabinet picks, and in particular, the nomination of former Fed Chair Janet Yellen as Treasury Secretary, has given the rally legs on the confidence that she will help steer the economic recovery.
Investor sentiment has been further boosted by a continuing flow of upbeat news on the vaccine front.
“The dominant driving force behind the market has been progress in vaccine development with AstraZeneca announcing yesterday that under a particular dosage, its vaccine is 90% effective and can be stored at room temperature making it significantly easier to distribute than Moderna and Pfizer’s vaccine,” Fiona Cincotta, a market analyst at data provider City Index, said.
Coronavirus vaccine developments have been a shot in the arm for global markets, and nowhere has that been more evident than in Asia-Pacific, where strong economic recovery, combined with a sense of control over the pandemic, have boosted investors' sentiment.
Japan’s Nikkei 225 index jumped 2.5%, Australia’s S&P ASX 200 advanced 1.26%, and Hong Kong’s Hang Seng index added 0.39%, but China’s CSI300 eased 0.61% following recent gains. Regionally, the MSCI Asia Pacific index rallied 2.13%.
Green light for Biden, Yellen
US General Services Administration chief Emily Murphy wrote in a letter to Biden on Monday that he can formally begin the hand-over process, following US President Donald Trump’s tweet that he was directing his team to cooperate on the transition.
Yellen, seen as an economic recovery specialist, is a labour economist whose apolitical stance makes her potential appointment as Treasury Secretary a huge relief to the market.
“President-elect Biden plans to nominate former Fed chair Janet Yellen as his Treasury Secretary, according to news sources. This may be music to market ears as she has opined that the US needs to 'continue extraordinary fiscal support',” OCBC’s head of research Selena Ling said.
The US dollar eased against a basket of currencies falling 0.3% to 92.2 while US Treasuries also fell in the risk-on environment, lifting the 10-year yield by 2 basis points to 0.87%.
ATF China Bond 50 Index: China bonds revive amid new vaccine hope
Also on Asia Times Financial
· Japan’s Nikkei 225 index jumped 2.5%
· Australia’s S&P ASX 200 advanced 1.26%
· Hong Kong’s Hang Seng index added 0.39%
· China’s CSI300 eased 0.61%
· The MSCI Asia Pacific index rallied 2.13%.
Stock of the day
China YuHua Education Corporation surged 4% after revenues jumped 40% and net profit climbed 45%.