Asia shares rebound, hoping for dovish Fed guidance

[Pelican Press 0]

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Asia shares rebound, hoping for dovish Fed guidance

****** shares have bounced ahead of a week packed with earnings and a trio of central bank meetings that could see the ******* States and *** open the door to easing, while Japan might lift borrowing costs in a step toward “normality”.

Also due on Monday is the US jobs report for July, closely watched surveys on US and global manufacturing, along with Eurozone ****** domestic product and inflation data.

The US Treasury will outline how much bonds it plans to sell for the quarter, while China’s politburo meeting could reveal more stimulus following surprise rate cuts last week.

After a benign June inflation report, markets are wagering the Federal Reserve will lay the groundwork for a September rate cut at its policy meeting on Wednesday.

Futures are fully priced for a quarter-point easing and even imply a 12 per cent chance of 50 basis points and have 68 basis points of easing priced in by Christmas.

“The FOMC is set to hold steady but is likely to revise its statement to hint that a cut at the following meeting in September has become more likely,” wrote analysts at Goldman Sachs in a note.

“We now see the risks to the Fed path as tilted slightly to the downside of our baseline of quarterly rate cuts, though not quite as much as market pricing implies.”

The Bank of Japan also meets on Wednesday and markets imply a 70 per cent chance it will hike rates by 10 basis points to 0.2 per cent, with some chance it could move by 15 basis points.

Investors are less sure whether the Bank of England will ease at its meeting on Thursday, with futures showing a 51 per cent probability of a cut to five per cent.

The prospect of higher borrowing costs in Japan has been a drag on the Nikkei, which shed six per cent last week as the yen rallied.

Early on Monday, the index did manage a bounce of 2.2 per cent following a firmer finish on Wall Street.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.4 per cent after losing two per cent last week.

S&P 500 futures added 0.4 per cent, while Nasdaq futures rose 0.6 per cent.

About 40 per cent of the S&P500 by market worth report this week, including tech darlings

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, Apple,

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.com and

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-parent Meta.

In currency markets, the ********* yen was giving back just a little of its recent gains with the dollar inching up to 154.15 yen from last week’s low of 151.93.

The euro was flat at $US1.0855, having found support about $US1.0825 last week.

In commodity markets, gold firmed 0.5 per cent to $US2,398 an ounce, supported by the prospect of a dovish Fed.

Oil prices inched up, having fallen one per cent last week amid concerns about ******** demand.

Brent gained 20 cents to $US81.33 a barrel, while US crude rose six cents to $US77.22 a barrel.

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#Asia #shares #rebound #hoping #dovish #Fed #guidance

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