Asian Stocks Climb on Dip Buying, Fed Cut Hopes – Asia Market Wrap
Asian stocks advanced as a wave of dip buying combined with growing bets on potential interest-rate cuts.
The MSCI Asia Pacific Index rose 0.6%, as South Korean shares gained 1.4%. Oil steadied after a three-day drop as investors weighed risks to Russian supplies, with US President Donald Trump stepping up his threat to penalize India for buying Moscow’s crude. Indian stocks fell 0.5% and the rupee weakened. Contracts for the S&P 500 gained 0.2% after the index had its biggest rally since May.
Traders are increasingly pricing in interest rate cuts by the Federal Reserve after Friday’s weak jobs report, which dragged down stocks and sent bond prices sharply higher. Equities have rebounded sharply from their April lows, driven by growing optimism that corporate America can absorb the impact from tariffs and the US economy will be able to avoid a recession.
In Japan, an auction of 10-year government notes on Tuesday drew weaker demand after poor US employment data last week fueled speculation of an early Fed rate cut, putting downward pressure on yields. The 10-year yields traded 4 basis points lower at 1.465% on Tuesday after the auction.
On the tariff front, the European Union is expecting Trump to announce executive actions this week to formalize the bloc’s lower levies for cars and grant exemptions from levies for some industrial goods such as aviation parts, according to people familiar with the matter. Meanwhile, the Swiss government said it is determined to win over Washington after last week’s shock announcement of 39% levies on exports to America.
