“The tapering debate is the sole focus of the market at present,” Matthew Sherwood, Sydney-based head of investment markets research at Perpetual Ltd., which manages about $25 billion, said in an e-mail. “I still believe Janet Yellen is unlikely to reduce stimulus until a couple of months into her new role.”

 

Eoin Treacy's view

Veteran subscribers will be familiar with our term “the Wall Street leash effect”, which we use to describe how much influence the world’s largest capital market exerts on global sentiment. Considering how dependent stock market investors have become on central bank largesse, we could say that “the Fed leash effect” is an increasingly important consideration.

The Hong Kong Hang Seng Index has encountered resistance in the region of 24,000 on a number of occasions since 2008 and is currently pulling back from that area once more. It will need to find support in the region of 23,000 if the medium-term progression of higher reaction lows is to hold and benefit of the doubt is to continue to be given to medium-term potential for a successful upward break.