11-7-2023 (HONG KONG) Asian shares rebounded, and the safe-haven dollar dipped on Tuesday as investors awaited U.S. inflation data to gauge the future of interest rates. Additionally, the prospect of China implementing economic stimulus measures to support its slowing growth added to the positive sentiment.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.7 percent early in the Asian trading day. U.S. stock futures, represented by the S&P 500 e-minis, also saw a 0.06 percent increase.
Market participants were digesting comments from Federal Reserve officials who indicated that while further rate hikes are necessary to address inflation, the end of the central bank’s tightening cycle may be near.
ANZ analysts noted that the upcoming U.S. Consumer Price Index (CPI) data would be a significant event, potentially influencing market sentiment.
Australian shares edged up 1.01 percent, and Japan’s Nikkei stock index rose 0.66 percent. China’s blue-chip CSI300 index was up 0.4 percent in early trade, while Hong Kong’s Hang Seng index opened with a 1.03 percent gain.
Yesterday, U.S. stocks closed higher, partially recovering from last week’s losses. The comments from Fed officials provided support for the view that the central bank is nearing the end of its tightening cycle.
On Wall Street, the Dow Jones Industrial Average rose by 0.62 percent, the S&P 500 gained 0.24 percent, and the Nasdaq Composite added 0.18 percent. Shares of Intel saw a 2.8 percent increase, and the semiconductor index was up by 2.1 percent.
This week, S&P 500 company earnings will kick off with reports from major U.S. banks. Analysts predict a 6.4 percent decline in second-quarter earnings compared to the same period last year, according to data from Refinitiv’s IBES.
In the U.S. Treasury market, the yield on 10-year Treasury notes slightly decreased to 4.0018 percent, while the two-year yield touched 4.8639 percent. These movements came as the Fed’s comments led investors to reduce their expectations of future interest rate hikes.
The Japanese yen strengthened to a near one-month high of 141.15 per dollar on Tuesday, benefiting from the decline in U.S. Treasury yields. The dollar index, which measures the greenback against a basket of currencies, reached a two-month low of 101.88.
U.S. crude oil saw a modest increase of 0.55 percent, reaching $73.39 per barrel, while Brent crude rose to $78.04 per barrel.
Gold prices were slightly higher, with spot gold trading at $1925.63 per ounce.
