Hong Kong (AFP) – Most stocks in Asia rose on Wednesday after a tepid day on Wall Street, as investors awaited the release of crucial US inflation data that could have a major impact on interest rate expectations.
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While markets reacted positively to last week’s blockbuster jobs report, which pointed to a still-strong economy, there is concern on trading floors that a third straight failure in the upside in consumer prices could force the Fed to delay cutting borrowing costs.
The CPI “is the critical number this week,” said Andrew Brenner of NatAlliance Securities. “The fear is that the CPI continues to be a thorn in the Fed’s side.”
He added, “Positions are strongly bearish.”
Investor expectations for interest rate cuts this year have been cut from six at the start of the year to a maximum of three, with some even considering zero, although some have suggested that not cutting interest rates may be the price to pay for economic health and profits. The strong one.
Atlanta Fed President Rafael Bostic sounded a practical note Tuesday when asked about the bank’s plans.
He reiterated his view that one cut would be made this year, but said he was open to changing his mind as the data emerges.
After being asked about the chances of it remaining the same throughout the year, he said: “I think the risks are balanced and given that the US economy has been very strong, very strong and very resilient – I cannot rule out the possibility of that.” “Maybe interest rate cuts will have to go further.”
But he also said: “If you start getting different signals that there’s a lot of pain coming on the labor market side, I would be open to changing our policy stance and maybe cutting sooner.”
However, Evercore’s Krishna Guha remained optimistic ahead of the CPI reading, adding that “odds are the data will come in good enough going forward.”
On Wall Street, the S&P 500 and Nasdaq posted small gains, but the Dow Jones fell marginally.
In early Asian trading, Hong Kong shares rose more than one percent, while Sydney, Taipei and Wellington were also in the green, although Shanghai fell.
Tokyo stocks also fell as a stronger yen weighed on exporters. The currency rose against the dollar after less than cautious comments from Bank of Japan President Kazuo Ueda.
The exchange rate has been closely watched with the yen falling towards 152 yen to the dollar this week, which many observers see as a catalyst for authorities to intervene to support the Japanese currency.
Last month, the central bank raised interest rates for the first time since 2007 as inflation continues to hold well above officials’ target, and speculation is growing about when it will move again.
“We should consider reducing the degree of monetary easing if the underlying rate trend rises along with our expectations,” Ueda told lawmakers on Tuesday.
“We will consider this carefully at every policy meeting because it is based on the data received.”
Key numbers around 0230 GMT
Tokyo – Nikkei 225: down 0.3% to 39,666.24 (break)
Hong Kong – Hang Seng Index: rose 1.3 percent to 17,045.88
Shanghai – Composite: Decreased by 0.1 percent to 3,044.78
USD/JPY: Decreased to 151.72 yen from 151.76 yen on Tuesday
EUR/USD: fell to $1.0856 from $1.0860
GBP/USD: fell to $1.2676 from $1.2678
EUR/Pound: fell to 85.63 pence from 85.64 pence
West Texas Intermediate crude: rose 0.1 percent to $85.30 per barrel
Brent North Sea crude rose 0.1 percent to $89.49 a barrel
New York – Dow Jones: flat at 38883.67 (close)
London – FTSE 100 index: down 0.1 percent to 7,934.79 (close)
—Bloomberg News contributed to this story—
© 2024 Agence France-Presse
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