Asian Stocks Levitate as Fed’s Repo Bonanza Continues

Journalist:
September 20, 2019

Asian stocks rose on Friday, with Japan’s benchmark index reaching new five-month highs amid reports that the Federal Reserve was pledging more liquidity to prop up the financial markets.

Asian Markets Rise

Stocks across the Asia-Pacific region rose in the final session of the week. Tokyo’s benchmark Nikkei rallied 0.4% and was on track for its highest settlement since late April. The Nikkei is up 6.9% over the past month and 10.6% since the start of 2019.

Japan’s Nikkei 225 is closing in on new five-month highs. | Chart: Yahoo Finance

Mainland China’s CSI 300 Index rose 0.2%. The benchmark Shanghai Composite Index also rose 0.2%. In Hong Kong, the Hang Seng Index rallied 0.3%.

The ASX 200 Index, Australia’s primary equities benchmark, was up 0.6% midday.

Fed Carries Out Third Repo Operation; Plans Fourth

The Federal Reserve stepped into the financial markets again on Thursday in another desperate attempt to keep short-term interest rates from rocketing higher.

For a third straight day, the New York Federal Reserve Bank conducted a repurchase operation to ensure local banks have enough liquidity to finance their day-to-day operations. The Thursday repo operation was valued at$75 billion, matching Wednesday’s level and much higher than the $53 billion pledged on Tuesday. All said, the U.S. central bank has injected $203 billion into the markets this week.

Anthony Pompliano, a renowned bitcoin bull and opponent of central-banking, tweeted late Thursday that the New York Fed was planning a fourth repo operation on Friday worth $75 billion.

“That will be more than $275 billion total in four days this week,” he said.

Prior to this week, the Fed’s last repo operations came in the aftermath of the 2008-09 financial crisis.

U.S. Stock Futures Edge Higher

Futures on U.S. equities traded slightly higher on Friday, pointing to a modest start to the New York session. Dow Jones Industrial Average (DJIA) futures were up 26 points, or 0.1%. S&P 500 futures advanced 0.1%. The Nasdaq 100 mini futures contract was also up 0.2%.

This article was edited by Sam Bourgi.

Sam Bourgi @hsbourgi

Financial Editor to CCN Markets, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi. Sam is based in Ontario, Canada and can be contacted at sam.bourgi@ccn.com