Stocks in Asia climbed higher across the board. Japan’s benchmark Nikkei 225 index was higher by 0.54 percent in early trade, while the Kospi registered a modest gain of 0.23 percent. The ASX 200 rose 0.26 percent.
In the U.S., stocks soared as McDonald’s and Caterpillar reported solid earnings, with the Nasdaq surpassing the 6,000 mark for the first time. The Dow Jones industrial average surged 1.12 percent or 232.23 points to close at 20,996.12.
“(T)oday’s moves appear to more related to expectations for Trump’s impending ‘broad principals’ tax plan … It is widely tipped that … the corporate tax rate (will) be cut to 15 percent from 35 percent. The key for markets will be how will such a tax cut be funded and what is the likelihood of the tax cut being passed by Congress.” National Australia Bank economist Tapas Strickland said in a note.
While markets may go higher on the back of flashy tax headlines, ThinkMarkets Chief Market Analyst Naeem Aslam added that the risk of a looming government shutdown had not been factored in sufficiently. Trump had requested for additional spending for his border wall plans, but has appeared to ease demands it happens this week.
“Not much is priced in again and we are seeing many safe haven(s) out of luck. But as we move closer to Saturday, this is when the government will start to shut down in case of a ‘no deal,’ we could see the last minute panic coming in the market once again,” he said.
In corporate news, Japan Post Holdings reported a $3.6 billion writedown on it’s Australian logistics unit, Toll Holdings. Japan Post also estimated losses of 40 billion yen ($362.35 million). This will be its first annual loss in around ten years. Stocks were off 0.15 percent in early trade.
Meanwhile, embattled Japanese conglomerate Toshiba said it would be parting ways with its auditor PricewaterhouseCoopers Aarata, according to the Nikkei. The auditor had not endorsed Toshiba’s Q3 earnings which had been released earlier this month. Toshiba shares rose 0.93 percent.
BHP Billiton cut its production targets for iron ore, coking coal and copper. The miner attributed the cut in production guidance to poor weather conditions in Australia. BHP Billiton stocks gained 0.73 percent.
In currency news, the Canadian dollar continued to trade at its lowest levels since last December due to trade concerns. The greenback last traded at C$1.3570 against the loonie.
Against a basket of rival currencies, the dollar traded at 98.851, dipping once more below the 99 handle. Meanwhile, the greenback sank against the yen, trading at 111.04, its weakest level in about a fortnight. Against the dollar, the Aussie traded at $0.7536, off the $0.756 handle seen on Monday.
Oil prices were lower following a report on the build in U.S. crude inventories. Brent crude futures traded 0.53 percent lower at $51.83 a barrel while U.S. crude futures were down 0.56 percent at $49.28.
On the economic calendar, Australia reports Q1 CPI at 9:30 am HK/SIN while Singapore industrial production numbers for March are expected at 1:00 pm. The Bank of Japan also embarks on a two-day meeting beginning today.