Asian markets drop as traders await Powell speech

Aug 21, 2019: Equities fell in Asia on Wednesday as investors took a step back after recent gains, with focus now turning to a key speech by Federal Reserve boss Jerome Powell at the end of the week.

Rising hopes for China-US trade talks have provided a much-needed lift to markets over the previous two days but with few fresh catalysts, dealers are keeping their powder dry ahead of Friday's address.

After positive signals from Donald Trump and some of his top advisers on Monday over progress in the talks with Beijing, and an olive branch with the delay of a ban on Huawei purchases, there have been few developments for traders to buy on.

"Our trade-war headline-inspired relief rally appears to have run its course as I suspect there is still a lot of nervousness among US investors as the global economic realities are just too hard to ignore," said Stephen Innes at Valour Markets.

Hong Kong and Shanghai were both 0.1 percent lower and Tokyo ended the morning down 0.4 percent. Sydney fell one percent, Singapore shed 0.3 percent and Wellington was more than one percent lower.

Taipei was 0.1 percent up and Seoul added 0.5 percent.

Powell's talk at the central bankers' gathering in Jackson Hole Wyoming will be closely pored over for clues about the Fed's plans for monetary policy, having cut interest rates last month for the first time since the financial crisis.

But experts are unable to agree on whether he will announce further cuts or stick for now.

There has been increased speculation that central banks and governments will step in with stimulus support to head off a global downturn, but analysts warn they could be disappointed by what Powell has to say regarding Fed action.

AFP/APP