The Nub

An Asian stock index rose on Thursday as investors evaluated China’s latest steps to shore up its economy and awaited a key speech by Federal Reserve Chair Jerome Powell about the monetary policy outlook.

Why Does it Matter

The regional gauge added about 0.5%, helped by gains in Japan. Morning trading in Hong Kong was scrapped due to a storm. US futures pushed higher in the wake of positive closes for the S&P 500 and Nasdaq 100. China stepped up stimulus with a further 1 trillion yuan (R2.46-trillion) of measures for an economy stricken by property-sector woes, Covid-linked mobility curbs and some power shortages. Mainland shares erased early gains, reflecting uncertainty about whether the efforts are sufficient.

What Next

Market angst ahead of Powell’s comments is centred on whether he will rebut expectations that slowing growth will temper monetary tightening in the next phase of the campaign against high inflation. Powell on Friday has the opportunity to reset expectations of a pivot and even rate cuts in 2023 and “if there’s anything he’s likely to push back against, it’s that – the fact that rates may have to come down” Anastasia Amoroso, the chief investment strategist at iCapital, said on Bloomberg Television.