Asia Pacific shares are set for further gains after the USD pulled back from 14 year highs overnight. The minutes from the December Fed meeting clipped hawks’ wings, and bond yields slipped back to pre-hike levels. Copper and oil rallied hard, meaning commodity exposed bourses may outperform today.

Expectations of an aggressive tightening stance were soothed by clear evidence from the Fed board of commitment to a gradual path higher for US interest rates. While the actual pace will depend on the data, the meeting minutes reset the market consensus. Growth forecasts are higher, leading investors into shares. The Dow Jones Industrial Average is within 0.25% of an all-time high above 20,000. Short sellers scrambled at the potential for a move through the psychological barrier to spur further buying.

Futures markets are pointing to opening gains in Hong Kong, Australia and Japan of around 0.5%. However, strong gains in energy markets and industrial metals overnight come on the back of a recent upgrade for South32 and a gas discovery for Santos and Oilsearch. This confluence could see resource companies lead the Australia 200 index to another 16 month high.

CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.