An index of Asian equities rose along with US and European futures amid optimism that the Federal Reserve will pause its most-aggressive tightening campaign in decades. Chinese shares bucked the trend, declining even after the People’s Bank of China cut a short-term policy interest rate to help aid the economy. The shift did have an impact in rates and currency markets, with Chinese bond yields sliding and the yuan weakening about 0.2% versus the dollar. The lowering of the seven-day reverse repurchase rate Tuesday heightens attention on the PBOC’s monthly operation Thursday for its medium-term lending facility. Any shift here could provide more significant stimulus to the market, while also underscoring how much China is struggling to rebound from the pandemic. Japanese shares showed the biggest gains in the region, with the Topix rallying more than 1% in a third day of gains that have taken the index to the highest level since 1990. The Nikkei 225 advanced about 1.6%. Contracts for US benchmarks rose slightly in Asia after the Nasdaq 100 and the S&P 500 closed at the highest levels since April 2022. Beyond the immediate action of the Asia session, all eyes remain on the Federal Open Market Committee, which is expected to keep interest rates in the 5%-5.25% range on Wednesday, assuming that consumer price index data later Tuesday shows subdued inflationary pressure. The likelihood of a hike is higher in July, with swaps showing an almost quarter-point of additional tightening priced in by next month’s meeting. Oil was fractionally higher after a heavy drop Monday that came as Goldman Sachs Group Inc. analysts cut their crude forecast for the third time in six months. Even with Saudi Arabia’s decision less than two weeks ago to cut 1 million barrels a day of production, the bank sees crude supplies swelling, and trimmed its year-end price estimate to $86. On Monday in the US, Tesla Inc. climbed for a 12th straight session — a record winning run — and Apple Inc. hit an all-time high. KeyCorp and Citizens Financial Group Inc. led losses in banks after disappointing updates at an industry conference. Oracle Corp. gained as its sales beat estimates, signaling the software maker’s cloud business is benefiting from demand for artificial intelligence workloads. US After Hours Quiet after-hours; ORCL +3.4% on solid MayQ earnings; MEI -9.3% on weak guidance.
Nikkei +2.07% Hang Seng +0.40% CSI +0.12% Shanghai -0.06% Shenzen +0.39%
Eur$ 1.0749 CNH 7.1693 CNY 7.1596 JPY 139.44 GBP 1.2530 CHF 0.9073 RUB 83.7766 TRY 23.6735 WTI$ 67.43 +0.46% Gold
1,961 +0.14% BTC 26,007 +0.43% ETH 1,744 +0.27%
S&P +0.21% Nasdaq +0.39% EuroStoxx +0.72% FTSE +0.40% Dax +0.70% SMI
Macro :
- China Central Bank Surprises With Rate Cut to Spur Economy
- Possible Taiwan-US Trade Treaty Could Pare Taxes for Apple, Nike
- Morgan Stanley Recommends Shorting Chinese Yuan Versus Baht, Won
- JPMorgan’s Kolanovic Says Bounce in Cyclical Stocks Won’t Last
- Goldman Sachs’s Gnodde Sees ‘Green Shoots’ in Capital Markets
Keep an eye on :
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