Asian shares rallied to two-year highs on Monday, driven by China's significant measures to tackle its property crisis and the anticipation of global rate cuts within weeks. Meanwhile, the dollar stabilized after a weekly decline.
Brent crude futures reached a one-week high of $84.14 a barrel early in the session, as news of a helicopter crash carrying Iran's president in heavy fog drew attention to the Middle East. Gold remained close to its record high at $2,423 an ounce.
Japan's Nikkei (.N225) rose 0.9% in early trading. Hang Seng futures indicated gains, and the MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) increased by 0.25% to a two-year high, with early gains in Australia and South Korea.
Following last week's record highs in global stocks due to easing U.S. inflation, this week's focus shifts to policy speeches, meeting minutes, a central bank decision in New Zealand, and Nvidia's results, with a lull in the data calendar.
"Whether this summer continues will require more than one swallow flying; it will require the confidence of central bankers and more economic proof," stated Bob Savage, BNY Mellon's head of markets strategy and insights, in a note to clients.
"The week ahead will pivot on the Fed speakers and (Fed) minutes in how they paint the picture of policy risks ahead, with a bias to ease rather than hike essential," he added.
Late last week, global bonds reversed a rally following encouraging U.S. CPI data, partly in response to comments from some policymakers.
U.S. Federal Reserve Governor Michelle Bowman reiterated her readiness to hike rates if progress on curbing inflation stalls or reverses.
European Central Bank board member Isabel Schnabel mentioned that the June rate cut anticipated by markets "may be appropriate" but tempered expectations for a series of subsequent cuts.
Two-year U.S. Treasury yields ended last week four basis points lower at 4.825% and remained steady in Asia trading. Ten-year U.S. yields dropped 8.4 basis points last week to 4.42%.
Two-year bund yields increased by 2 basis points to 2.988%.
China announced "historic" measures on Friday to stabilize its property sector, including the central bank's provision of 1 trillion yuan ($138 billion) in additional funding, easing mortgage rules, and local governments' plans to purchase "some" apartments.
This led to the Hang Seng (.HSI) reaching a nine-month high and growth-sensitive copper prices hitting a 26-month peak. Additionally, three-month nickel surged to its highest level in nine months due to unrest in New Caledonia, a major nickel exporter.
In currency markets, the dollar logged its largest weekly drop against the euro in two and a half months last week but was steady in early Asian trading on Monday.
The euro held steady at $1.0873 on Monday, while the yen was slightly softer at 155.82 per dollar. The Australian dollar, which rose 1.4% last week, held at $0.6698 on Monday, and the New Zealand dollar hovered at $0.6135. The Reserve Bank of New Zealand is expected to keep its main cash rate at 5.5% when it sets interest rates on Wednesday.
"We don't think the RBNZ will be as confident as markets are that cuts are just around the corner, and if that is the case, we may see short-end rates lift a touch this week," stated analysts at ANZ Bank.
Meeting minutes from Australia's central bank and the Federal Reserve are due this week, along with flash global PMIs.
S&P 500 futures rose 0.2% in early trading. Bitcoin dipped about 1% to $65,863.
Paraphrasing text from "Reuters" all rights reserved by the original author.
