Asian shares echo Wall Street rise on Fed bets: Markets wrap

(Bloomberg) — Asian shares rose after a subdued session on Wall Street that suggested the Federal Reserve is poised to cut interest rates.

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The MSCI ACWI index, which tracks both emerging and developed stocks, posted a ninth straight day of gains — the longest stretch of gains since December. Stocks advanced in Japan, South Korea and Australia, while stocks in China fell.

The bullish momentum was fueled by upbeat sentiment in the US, where the S&P 500 rose for an eighth straight day. Asian currencies hit their highest level since January after the United States said Israel had accepted a ceasefire proposal in Gaza, while oil extended its biggest drop in two weeks.

Challenges to an imminent Fed easing are buoying equity markets, with investor allocations still strong despite recent volatility and increased uncertainty around the economy. The MSCI Asia Pacific index has gained in all but two sessions since Aug. 6, underscoring expectations that U.S. policymakers may cut interest rates in September.

“What we saw was part of the latest data that eased fears of a slowdown in U.S. growth without fueling fears of a rebound in inflation,” Capital.Com Inc. said. said Kyle Rhoda, senior market analyst at It benefits Asia’s ex. -Japan equities, he added, “are supported by weak dollar financing conditions and risk appetite.”

The 10-year Treasury yield was higher, while contracts for U.S. stocks were little changed. Copper was in its latest rebound and gold was in record-setting form, rising to $2,500 an ounce on expectations that the central bank is ready to cut interest rates. The yen fell to 147 per dollar.

In Australia, the central bank signaled it would hold interest rates at current 12-year highs for an “extended period” to ensure inflation returns to its target band next year. Meanwhile, Chinese banks kept their key lending rates unchanged for August as profit margins came under pressure and policymakers focused on the health of financial institutions.

Stocks are lower due to a trading surge during the early August selloff as traders hesitate to place big bets ahead of the Fed’s Jackson Hole Economic Symposium this week. Central bankers gathering for one of the world’s most important annual economic forums will find themselves more divided than at any time since before the pandemic.

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“Markets are noticing increasingly disillusioned Fed speakers as they recall economic data for Fed cuts of late,” said Jessica Amir, market strategist at Moomoo. “This runway sets up a ‘hole in one’ market in Jackson Hole, expecting the Fed Reserve chair to flag incoming rate cuts.”

In Europe, rising risks to the growth outlook have strengthened the case for a policy adjustment when the European Central Bank meets next month, Governing Council member Olli Rehn said.

Meanwhile on the corporate front, Alimentation Couche-Tard Inc. 7-Eleven’s owner Seven & i Holdings Co. A preliminary proposal to buy I could be worth as much as ¥5.63 trillion ($38.4 billion), a possible deal based on the Japanese company’s market value.

Highlights of this week:

• Eurozone CBI, Tuesday

• US Fed minutes, BLS preliminary annual wages revision, Wednesday

• Eurozone HCOB PMI, Consumer Confidence, Thursday

• The ECB will publish an account of the July rate decision on Thursday

• US Initial Jobless Claims, Existing Home Sales, S&P Global PMI, Thursday

• Japan CBI, Friday

• Bank of Japan Governor Kazuo Ueda on Friday to participate in a special session of Japan’s parliament to discuss a July 31 interest rate hike.

• US new home sales, Friday

• Fed Chairman Jerome Powell speaks at the Jackson Hole Symposium in Wyoming on Friday

Some key movements in the markets:

Shares

• S&P 500 futures were little changed as of 2:03pm Tokyo time

• Nasdaq 100 futures rose 0.1%

• Japan’s Topix rose 1.2%

• Australia’s S&P/ASX 200 rose 0.2%

• Hong Kong’s Hang Seng fell 0.3%

• The Shanghai composite fell 1%

• Euro Stoxx 50 futures rose 0.1%

Coins

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.1077

• The Japanese yen fell 0.3% to 146.98 per dollar

• The offshore yuan fell 0.1% to 7.1438 per dollar

Cryptocurrencies

• Bitcoin rose 3.1% to $60,927.3

• Ether rose 1.9% to $2,667.74

Bonds

• The yield on 10-year Treasuries was little changed at 3.88%.

• Japan’s 10-year yield unchanged at 0.885%

• Australia’s 10-year yield rose three basis points to 3.95%

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This story was produced with the help of Bloomberg Automation.

–With assistance from Jason Scott.

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