Asian shares subdued after Trump address, Aussie tumbles on RBA shift

TOKYO/SYDNEY (Reuters) – Asian shares were subdued on Wednesday after U.S. President Donald Trump’s State of the Union address failed to give markets fresh trading catalysts, while the Australian dollar nosedived after the central bank opened the door to a possible rate cut.

Spread-betters expect London’s FTSE and Frankfurt’s DAX to respectively drop 0.2 percent and 0.1 percent when they open, while seeing a slightly larger fall for Paris’s CAC.

MSCI’s broadest index of Asia-Pacific shares outside Japan was barely changed with China and several other markets in the region still closed for the Lunar New Year holiday. The range in which the index traded was limited to just 0.80 points, the narrowest since Dec. 25 last year.

Australian shares gained 0.3 percent, rising for the third session, while Japan’s Nikkei closed up 0.1 percent. E-Mini futures for the S&P 500 last were a tad higher.

The Australian dollar shed nearly 1.3 percent to hit a one week low of $0.71435, putting it on course for its biggest intraday drop in more than five months.

The sharp selloff in the Aussie came after Reserve Bank of Australia (RBA) Governor Philip Lowe said the bank remained optimistic about the local economic outlook but acknowledged rates might fall if unemployment were to rise and inflation stay too low.