(Bloomberg) — Asian stocks posted gains as Wall Street rose on Monday, heading into a week of big central bank decisions and earnings releases from big technology companies.
Bloomberg’s Most Read
Stocks rose in Australia, Japan, Hong Kong and South Korea. The upbeat tone came after U.S. stocks rose on Friday amid bets that imminent interest rate cuts will help boost corporate profits. companies. US stock futures gained on Monday.
Monetary policy decisions in Japan, the US and the UK are in focus this week after global markets were devastated last week by a rally in the yen on bets that the Bank of Japan could raise its rate. basic. A range of earnings, including Apple Inc., Amazon.com Inc and Microsoft Corp., will also be analyzed for clues about the health of the world’s largest economy.
Buoyed by bets on a potential rate hike in Japan, the yen erased earlier losses against the dollar and advanced against all its Group of 10 peers. 10-year Treasury yields fell two basis points to 4.17%.
“Keep an eye on the triad of policy decisions from the central bank, namely the FOMC, which will likely remain static but hint at a rate cut soon,” the Oversea-Chinese Banking Corp. analysts wrote. The Bank of Japan is likely to announce quantitative tightening, while the Bank of England “is expected to enact its first rate cut since 2020”.
The Fed will likely signal its plans for September cuts at the conclusion of its meeting Wednesday, according to economists polled by Bloomberg News, a move they say will kick off quarterly reductions through 2025. Money markets are weighing entirely a September measure. , with a chance of two more by the end of the year, according to swaps data compiled by Bloomberg.
“While the July FOMC meeting is probably too early to begin cutting, it is not too early to begin preparations for a September rate cut,” Stephen Gallagher, an economist at Societe Generale, wrote in a note to clients.
Just hours before the Fed’s decision, the Bank of Japan is expected to release details of plans to cut monthly bond purchases at the end of its two-day policy meeting on Wednesday, while most economists also see the risk of an increase in rates. The yen rose 2.4% against the dollar last week, with traders pricing in a more than two-thirds chance of a 10 basis point rise, triggering a sell-off in risk-sensitive developed and emerging market currencies and helping the send the Nikkei 225 index into a technical correction. .
“Prices in the derivatives market warn that the Bank of Japan’s failure to raise rates could be more destabilizing than the rate rise itself,” wrote Marc Chandler, chief market strategist at Bannockburn Global Forex, in a note to clients . “Failure to raise rates will likely spur yen sales.”
Elsewhere in Asia, Chinese industrial activity data will be released this week, providing more insight into a surprise rate cut from the People’s Bank of China to boost a struggling economy. Australian inflation data will also be eagerly awaited, as investors and analysts debate whether the country’s central bank will raise its key rate as early as next week.
Oil has steadied near a six-week low ahead of a key OPEC+ meeting this week, with analysts divided over whether the group will press ahead with plans to increase supply next quarter. Although the coalition is trying to restore supplies, it is held up in the market for two years in an attempt to support prices, which causes economic growth in China, a major consumer, and new oil supplies from across the Americas threaten to derail the plans.
Tensions in the Middle East also showed little sign of easing, as Turkish President Recep Tayyip Erdogan suggested the country could intervene on behalf of the Palestinians, possibly with military support. Israel attacked Hezbollah on Sunday and threatened additional retaliation for a rocket attack, although it signaled openness to a proposed truce in Gaza that could also calm the second and more fueled front with Lebanon.
Some of the main movements in the markets:
Actions
-
S&P 500 futures were up 0.5% at 10:32 a.m. Tokyo time
-
Nikkei 225 (OSE) futures rose 2.6%
-
Japan’s Topix rose 2.3%
-
Australia’s S&P/ASX 200 rose 0.8%
-
Hong Kong’s Hang Seng rose 1.1%
-
The Shanghai Composite fell 0.4%
-
Euro Stoxx 50 futures rose 0.6%
Coins
-
The Bloomberg Dollar Spot index was little changed
-
The euro rose 0.1% to $1.0867
-
The Japanese yen rose 0.2% to 153.43 per dollar
-
The offshore yuan was little changed at 7.2611 per dollar
Cryptocurrencies
-
Bitcoin rose 1.2% to $68,814.24
-
Ether rose 1% to $3,291.73
Titles
goods
-
West Texas Intermediate crude fell 0.1% to $77.07 a barrel
-
Spot gold rose 0.3% to $2,394.23 an ounce
This story was produced with help from Bloomberg Automation.
–With assistance from Matthew Burgess.
Bloomberg Businessweek Most Read
©2024 Bloomberg LP
