HONG KONG (Reuters) – Asian stocks rose and the safe-haven dollar fell on Tuesday as investors hoped US inflation data this week would support an imminent end to interest rate hikes and cheered the prospect of China providing an economic stimulus to support a slowdown. growth.
Markets await US inflation data due on Wednesday to see if price pressures continue to moderate, which could provide clues to the interest rate outlook.
European markets were preparing for a higher open, with Euro Stoxx 50 futures across the region up 0.26%, German DAX futures up 0.37%, and FTSE futures down 0.02%.
In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 1.6%, while US stock futures, the S&P 500 e-minis, rose 0.07%.
Investors were digesting comments from several Federal Reserve officials on Monday who said that while additional interest rate hikes are needed to bring down inflation, the end of the central bank’s current monetary tightening cycle is nearing.
“US CPI will come into focus, with associated event risks likely to increase,” ANZ analysts said in a note.
Australian shares (.AXJO) rose 1.23%, while Japan’s Nikkei (.N225) rose 0.14%.
China’s Super CSI300 Index (.CSI300) rose 0.63% in afternoon trade. Hong Kong’s Hang Seng Index (.HSI) advanced 1.75%.
Data showing a sharper-than-expected decline in Chinese producer prices on Monday suggested that “the country’s post-COVID recovery has run out of steam” but added to expectations that “policy makers may need to do more to support demand.” Analysts.
Chinese regulators on Monday extended some of the policies in a bailout package introduced in November to shore up liquidity in the beleaguered real estate sector.
Analysts said that while the expanded policy could ease short-term financial pressure on real estate developers and ensure completion of their home projects, new measures are needed to address the sector’s liquidity crunch.
Ting Lu, chief China economist at Nomura, writes that the current measures are “unlikely to sufficiently stimulate home purchases and rescue the real estate sector.” “Beijing may need to take more action to stop the downward spiral.”
US stocks closed higher on Monday after last week’s losses while comments from Federal Reserve officials reinforced the view that the US central bank may be nearing the end of its tightening cycle.
On Wall Street, the Dow Jones Industrial Average (.DJI) rose 0.62%, the S&P 500 (.SPX) rose 0.24%, and the Nasdaq Composite Index (.IXIC) rose 0.18%.
S&P 500 earnings are set to kick off this week with reports from some major US banks. IBES data from Refinitiv showed that analysts expect earnings to fall 6.4% in the second quarter year over year.
In US treasuries, the yield on the benchmark 10-year Treasury note came in at 3.9879% compared to its US close of 4.006% on Monday. The two-year yield, which rose as traders expected higher federal funds rates, rose to 4.8515% compared to the US close of 4.862%.
The Fed’s comments sent the dollar to a two-month low of 101.75 against a basket of currencies in early Asian trade, as investors cut their expectations about how high US interest rates will be.
The Japanese yen rose to a one-month high of 141.15 per dollar on Tuesday and last bought 140.735 per dollar, drawing support from falling US Treasury yields.
US crude rose 0.66% to $73.47 a barrel. Brent crude rose 0.58% to $78.14 a barrel.
Gold was a little higher. Spot gold was trading at $1929.59 an ounce.
Editing by Sam Holmes and Jamie Fried
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