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However, he acknowledged that the central bank action could lead to more volatility in the markets, although insisting that the overall impact would be manageable.
Ironically, but unsurprisingly, his comments caused more fear than allayed them.
The VIX index, a measurement of fear, spiked to around 14.5 from 12.0, indicating that renewed anxiety of rate normalisation is gushing back into the markets. Some positive US data added to the fear.
Durable goods orders was in line with expectations in April, but for March reading it was revised higher to 5%.
Consumer confidence also improved further, while new home sales beat consensus. European indices ended in the red accompanied by US equities, which fell around 1%.
It was a dollar move, more than anything else that hit the commodities, although they seem to find some support in early Asia. Gold stayed around USD 1180+, although the advance beyond USD 1200 last week had always look shaky.
We could still see more downside into the month-end should the greenback gain more ground. Likewise, oil prices found a floor, albeit potentially a temporary one. Brent crude was last seen edging back towards USD 64 after dropping to a one-month low.
Oil still looks vulnerable for the coming weeks, with news of Iranian plans to raise its crude oil production which doesn’t help the matter. Unfavourable fundamentals of oversupply and under demand continue to persist, which would imply any oil rallies are likely to be short-lived.
In China, we wonder if the strong gains seen early this week will continue on Wednesday given weaker risk sentiment. The China A50 futures suggest that bulls may take a breather today but with Chinese equities, it is really difficult to say.
A clutch of positive news over the past-two days has helped sentiments in the Chinese stock markets. But this could be eclipsed by the 23 A-share IPOs slated for 2-3 June 2015.
Bloomberg estimated that the listings may lock up CNY 4.9 trillion (USD 790 billion) of liquidity. Meanwhile, China’s data on industrial profits and consumer sentiment may be of interest.