Asian stocks were higher after Wall Street equities rose as investors weighed a U.S. deal that ensures the funding of its government through mid-December against persistent geopolitical tensions. The yen stayed lower after an overnight drop.
Most industry groups advanced, lifting the MSCI Asia Pacific Index. U.S. markets gyrated late Wednesday amid several events that happened in rapid succession, including the resignation of Federal Reserve Vice Chairman Stanley Fischer and a surprise Canadian interest-rate increase. U.S. stocks climbed, the dollar pared losses and 10-year Treasury yields rose, while rates on bills due late this month fell after President Donald Trump sided with Democrats on the deal to extend the U.S. debt limit for three months. Traders are also watching Category 5 hurricane Irma, which is headed for Florida.
While the U.S. agreement pushes to the side the North Korea confrontation that has dominated markets most of this week, traders will remain watchful for developments amid concerns Pyongyang may fire a ballistic missile before its “founding day” on Sept. 9. Meanwhile, the Fischer departure, effective next month, adds to uncertainty about Fed leadership, given that Janet Yellen’s term as chair expires early next year.
Attention now turns to the European Central Bank meeting on Thursday, with investors looking for clarity from President Mario Draghi on the outlook for the the ECB’s bond-buying program. The Governing Council has been presented with documents outlining multiple scenarios for adjusting quantitative easing, according to euro-area officials familiar with the matter. – Bloomberg