Asia shares cheered by hopes of early rate cuts

asia-shares-cheered-by-hopes-of-early-rate-cuts
Asia shares cheered by hopes of early rate cuts

Asian shares rallied for a fourth consecutive session on Monday as investors factored in anticipated rate cuts in the United States and Europe. This optimistic outlook will be tested by a series of central bank speakers scheduled for this week. Bond markets also experienced a recovery following a positive U.S. payrolls report and strong productivity numbers, which suggested that further rate increases from the Federal Reserve may not be necessary. Futures markets now indicate a 90% chance that the Fed is finished raising rates, with an 86% chance of the first policy easing occurring as early as June. Additionally, there is an 80% probability that the European Central Bank will cut rates by April, and the Bank of England is expected to ease in August. Central bankers, including Fed Chair Jerome Powell, will have the opportunity to share their perspectives on this dovish outlook. However, Australia’s central bank is expected to resume raising rates due to stubbornly high inflation. The Bank of Japan is also on a path to tightening, although at a slow pace. The MSCI’s broadest index of Asia-Pacific shares outside Japan gained 2.0%, while Japan’s Nikkei rose 2.4% and South Korea climbed 4.3%. Chinese blue chips also saw gains of 1.3%. Bond yields paused, with two-year Treasury yields at 4.86% and 10-year notes at 4.586%. The retreat in Treasury yields weakened the dollar, which remained pinned at 105.080. The euro remained firm at $1.0735, and gold held steady at $1,983. Oil prices edged higher after a 6% decline last week, supported by Saudi Arabia and Russia’s commitment to continue their additional voluntary oil output cuts. In the Middle East, Israel rejected calls for a ceasefire in Gaza, indicating that military operations against Hamas will intensify. Brent crude added 43 cents to $85.32 a barrel, while U.S. crude climbed 54 cents to $81.05 per barrel.

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Hi, I'm Alex Perez, an experienced writer with a focus on lifestyle and culture news. From food and fashion to travel and entertainment, I love exploring the latest trends and sharing my insights with readers. I also have a strong interest in world news and business, and enjoy covering breaking stories and events.

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