The Asian and Pacific Rim financial markets were mixed by late morning after the Peoples’ Bank of China (PBOC), their central bank, left monetary policy and rates the same for the month.
On Japan, the Asian benchmark in Tokyo, the Kospi composite index was up a quarter of a percent. The headline Nikkei 225 was up nearly three quarters of a percent.
Elsewhere in the Asian region, the Australian S&P ASX 200 fell 0.29 percent on the day.
In Hong Kong, the Hang Seng index was up 0.34 percent and the indices on the mainland, in China, fell lower by late morning. The Shanghai composite lost 0.2 percent as did the smaller Shenzhen composite.
This morning, the PBOC left their benchmark one year loan prime rate (LPR) at 3.85 percent. The PBOC also left their five year loan prime rate at 4.65 percent. This was in line with expectations.
Asian Traders Monitor News of a European Stimulus Package
Overnight, Germany and France, proposed a €500 billion recovery fund. This fund will offer regional grants for businesses severely impacted by the Covid-19 shutdown. This program will allow the European Commission to borrow for the entire European Union.
This plan does face some hurdles from the more established Eurozone economies in the northern Eurozone area but moves the single currency bloc one step closer towards a cohesive fiscal stimulus package to insulate against the economic damage seen by the pandemic.
Looking at economic data, German investor sentiment improved better than expected in the month of May. Concerns over the Covid-19 virus are improving but linger as the economic damage to the German economy becomes clearer.
A Possible Vaccine and Hopes for one Evaporate
STAT, a medical news website, based in the United States, said that early data from Moderna’s Covid-19 vaccine was insufficient.
This has dampened expectations for a quick vaccine solution and capped gains seen with the dollar.