[MARKET ANALYSIS] Asia-Pac stocks trade mixed after a hawkish Fed and US-Iran MoU signing

APAC Stocks: Mixed

• Asia-Pac stocks trade mixed as the region reflects on the latest major key events, including the hawkish FOMC and Fed chair Warsh's first presser, in which the Fed kept rates unchanged, removed forward guidance, emphasised price stability, and provided hawkish dot plots. This triggered selling in stocks, treasuries and gold, while it boosted the dollar and yields, with money markets returning to fully pricing in a hike this year. However, the moves have since been pared to varying degrees as oil prices gradually declined following the announcement that the US and Iran have both signed the MoU for ending the war, which is now in effect, but with the planned talks on Friday in Switzerland, said to not yet be certain.

ASX 200: -0.5%

• Index is subdued with most sectors in the red and with tech and miners leading the declines.

Nikkei 225: +1.7%

• Extended on record highs with the index briefly surpassing the 71,000 level as manufacturers benefit from lower oil prices and optimism of the reopening of shipping in the Strait of Hormuz.

Hang Seng & Shanghai Comp: Hang Seng -1.9% / Shanghai Comp -0.4%

• Chinese markets are lower with underperformance in Hong Kong as the hawkish FOMC and increased prospects of a rate hike this year, pressure the local benchmark, given that any rate hike in the US would compel the HKMA to move in lockstep with the Fed to defend the USD/HKD peg.

US Equity Futures: Positive

• Rebounded from the post-FOMC trough with the help of the US-Iran MoU signing.

European Equity Futures -0.7%

• Indicate a lower cash market open with Euro Stoxx 50 futures down 0.7% after the cash market closed with gains of 0.7% on Wednesday.