U.S. markets closed at record highs on Tuesday, shrugging off North Korea’s latest missile launch. In Asia, meanwhile, futures indicated gains at the open for major markets in the region.
North Korea on Wednesday local time launched a likely intercontinental ballistic missile that landed in the Sea of Japan, according to the Pentagon. The launch, the North’s first since Sept. 15, came after the U.S. classified North Korea as a country that supported terrorism on Nov. 20.
Following the launch, President Donald Trump said the U.S. would “take care of” the situation. Japanese Prime Minister Shinzo Abe and Trump have also agreed to increase their cooperation on the North, Reuters said, citing Japanese media.
Stateside, markets turned their attention to tax reform after the Senate Budget Committee approved the Republican tax bill, a crucial step toward a vote in the full chamber later this week. Senate Republicans, who hold 52 seats, can only afford to lose two votes to still pass the bill under special budget rules.
Meanwhile, Federal Reserve chair nominee Jerome Powell indicated the case for a December rate hike was “coming together.” Powell also said he favored “tailoring” regulations on financial institutions, adding that regulation on smaller banks ought to be decreased in intensity.
The dollar was broadly firmer following Powell’s comments, with the dollar index coming off a two-month low touched earlier this week. That index stood at 93.224 at 7:01 a.m. HK/SIN, after trading at the 92 handle earlier in the week.
Also of note were reports that a divorce bill between the U.K. and the European Union had been agreed upon, with newspapers citing a sum around 50 billion euros ($59 billion).
The pound rose as high as $1.3386 on the news in the overnight session after trading as low as $1.3219. The currency pared some gains to trade at $1.3350 at 6:47 a.m. HK/SIN.
The North’s latest missile launch failed to dent sentiment stateside, with U.S. stocks closing the Tuesday session higher as markets focused on tax reforms. Financials also got a boost following Powell’s comments on regulation.
Major U.S. indexes closed at record highs. The Dow Jones industrial average rose 1.09 percent, or 255.93 points to close at 23,836.71, the S&P 500 gained 0.98 percent to end at 2,627.04 and the Nasdaq composite tacked on 0.49 percent to close at 6,912.36.
In Asia, futures pointed to a higher open for Japanese equities. Nikkei futures traded in Chicago were up 0.66 percent at 22,635 and Osaka futures were 0.64 percent higher at 22,630.
Down Under, the S&P/ASX 200 rose 0.44 percent in early trade.
Oil prices came under slight pressure ahead of a Thursday meeting of major oil producers. Brent crude futures declined 0.4 percent to settle at $63.61 per barrel and U.S. West Texas Intermediate shed 0.2 percent to settle at $57.99.
The economic calendar for Wednesday is fairly light (all times in HK/SIN):
- 7:50 a.m.: Japan retail sales
- 1:00 p.m.: Singapore import, export prices
- Vietnam inflation, industrial production and trade data are also due
— CNBC’s Jacob Pramuk contributed to this report.
Source: cnbc china
Futures point to higher open for Asia despite North Korea missile launch