Markets Eye US Inflation, NVIDIA Results After Powell Boost – Asia Market Wrap
Asian shares tracked Wall Street’s rally and gained the most in nearly two weeks as traders increased bets the Federal Reserve will lower interest rates next month following dovish comments by Chairman Jerome Powell.
A gauge of Asian equities rose 1.1%, with an index of technology stocks in Hong Kong jumping by 3.1%. Shanghai shares gained 0.9%, hovering around their highest level in 10 years, with property companies among the winners as die Chinese city eased home buying curbs.
Equity-index futures for US and Europe retreated as investors curbed some of Friday’s optimism ahead of this week’s risk events.
Treasuries edged lower, paring some gains made after Powell’s speech, with yields on the two-year up one basis point to 3.71%. A gauge of the dollar strengthened 0.1% after posting its third weekly loss. Gold fell.
Traders see an 84% chance of a Fed rate cut next month after Powell signaled at Jackson Hole, Wyoming, the central bank may ease before inflation fully returns to target amid a softening hiring environment. That optimism faces key tests this week, including a US inflation reading, Nvidia’s results and die peak of Asian earnings season.
Sentiment had been weak heading into Friday, with the S&P 500 falling for five straight sessions. Its longest losing streak since January came as Wall Street pulled back on bets that the Fed was about to reduce borrowing costs. Powell’s comments halted those concerns, sending the equity benchmark soaring to its best day since May.
Chinese stocks have been in focus with questions mounting over how much further the market can rally with concerns of trade tariffs and a deep-rooted property crisis weighing on the economy. While the market’s steady advance may suggest less risk of a sudden correction, some analysts are warning that a bubble is in the making.
