Asian equities poised to advance, dollar declines

Asian shares were poised to track overnight US gains that pushed equities to fresh highs.



Australian equities opened higher. Meanwhile, the equity-index futures for Hong Kong increased. Contracts for Japanese benchmarks declined nearly 4% post a public holiday and as the yen weakened.

Asian shares have outpaced the S&P 500 this year, even as the US benchmark rose 0.2% to close at a record high.

Treasuries sold off across the curve and the dollar declined during the US session. Precious metals rallied, with gold and silver touching fresh highs after the Trump administration escalated its attacks on the Federal Reserve.

Upward momentum in equity markets indicated investors are looking through any potential compromise to the Fed’s ability to independently set interest rates. On Sunday, Fed Chair Jerome Powell said the central bank had been served grand jury subpoenas from the Justice Department threatening a criminal indictment.

The Fed’s perceived independence from government whims is a bedrock assumption of markets, and any change to that perception could weigh on sentiment. While independence risks will likely be a key theme in 2026, Krishna Guha at Evercore said there are two ways to interpret US markets stabilizing.

Fund managers at big bond firms such as Pacific Investment Management Co., PGIM and DWS Group, have warned that Trump’s assault on the Fed is at odds with his goal of pulling down interest rates. Instead, the pressure is adding a new risk into markets that could push bond yields higher.

The latest salvo between the Trump administration and the Fed comes as investors navigate a chaotic backdrop.

The president has taken aim at credit card companies, homebuilders and defense contractors — while also considering a US role in the Iranian protests after capturing Venezuela’s leader earlier in January. Late Monday, Trump said he would impose a 25% tariff on any country that’s “doing business” with Iran.

With inputs from Bloomberg

Also Read: Trade Setup for January 13: Nifty stages a comeback but sustaining the recovery remains key