Asian stocks reached their highest levels in 15 months on Tuesday, bolstered by growing confidence in potential U.S. interest rate cuts. Investors kept a close watch on a policy meeting in Australia and the weakening yen.
In early trading, MSCI's broadest index of Asia-Pacific shares outside Japan rose by 0.3%. Hong Kong shares, which experienced a significant surge fueled by mainland investment, saw marginal declines following a 10-day winning streak, the longest since 2018.
Japan's Nikkei climbed by 1.3%, and S&P 500 futures remained steady after the index recorded a 1% increase overnight.
The positive sentiment stemmed from last week's U.S. jobs data, which fell below expectations, along with statements from Federal Reserve Chair Jerome Powell indicating a likelihood of future rate cuts.
Goldman Sachs economist David Mericle highlighted Powell's confidence in the current policy being restrictive and suggested a cautious approach to rate hikes unless inflation progress falters.
Treasuries, which rallied following the jobs report, maintained stability in New York overnight, with 10-year yields holding at 4.49% in Tokyo on Tuesday. Markets anticipate at least one U.S. rate cut later this year, possibly in November.
The anticipation of declining rates exerted pressure on the dollar, except against the yen due to expectations of minimal movement in Japanese rates.
The Reserve Bank of Australia (RBA) is expected to keep rates unchanged at its meeting, with attention on any shifts in tone or outlook, particularly regarding the possibility of rate hikes following a surprise in inflation data.
Commodity markets saw slight movements, with oil slightly firmer and gold maintaining its overnight rise. Concerns over weather conditions in Russia and Brazil drove up wheat, corn, and soybean futures, while iron ore futures rallied on reports of potential support measures for China's property sector.
In Europe, German factory orders are anticipated, and Disney is scheduled to report earnings. Meanwhile, Australia's ANZ Bank reported a 7% profit drop, leading to a 2.3% decline in shares despite announcing a buyback.
Paraphrasing text from "Reuters" all rights reserved by the original author.
