Bonds Trade Flat, Stocks Rise on Rate-Cut Bets – Asia Market Wrap

Stocks rose and bonds remained stable as benign US inflation data reinforced predictions that the Fed will lower interest rates this year. Trading volumes were low due to public holidays in the US and China.

Europe’s Stoxx 600 index increased 0.3% as banking stocks recovered from a severe drop last week. NatWest rose 4% after Citigroup increased its price objective for the UK lender. S&P 500 futures rose 0.4%. German bunds and Treasury futures remained stable after US rates fell to their lowest level since December on Friday.

Trading was light on Monday due to the Presidents’ Day vacation in the US and mainland China’s markets being closed for the Lunar New Year. Still, the direction of US interest rates remains in focus following Friday’s slower-than-expected US inflation reading, as traders completely price in a Fed decrease in July and a significant possibility of a move in June.

Gold fell below $5,000 per ounce after traders took profits on a previous session’s gain. Silver dropped 1%.

The Dollar remained unchanged. Bitcoin was barely changed at $68,750 after registering its fourth consecutive weekly loss, with the cryptocurrency struggling to find a clear direction as a weekend surge collapsed.