Asia-Pacific shares pushed higher on Tuesday on hopes the U.S. Federal Reserve will cut interest rates as soon as next week, even as political tensions and policy risks kept currency and bond markets cautious.
MSCI’s index of Asia-Pacific stocks outside Japan rose 0.2% in early dealings, after a strong Wall Street day that ended with a Nasdaq record.
In New York, the S&P 500 rose 0.2%, just shy of last week’s record. The Dow added 114 points (0.3%), and the Nasdaq gained 0.5% to a new record.
Pricing in futures shows just over a 10% chance of a 50bp cut this month, up from none a week ago, according to the CME FedWatch tool. European equity futures softened after cash-market gains on Monday. EUROSTOXX 50 futures slipped 0.17%, FTSE futures eased 0.04%, and DAX futures dipped 0.22%.
Japan’s Nikkei 225 rose almost 0.3% to 43,763.96; Australia’s ASX 200 fell 0.5% to 8,806.60; South Korea’s Kospi climbed 0.6% to 3,238.07; Hong Kong’s Hang Seng added 1.2% to 25,949.48; the Shanghai Composite edged up 0.1% to 3,831.45.
In currencies, the yen rose 0.1% to 147.37 per dollar, undoing yesterday’s drop, while the euro was steady at $1.1768. Japanese government bond yields fell after rising a day earlier, since prices and yields move opposite each other.
The U.S. dollar dropped to its lowest level in nearly seven weeks on Tuesday as per Reuters.
U.S. yields stood near their lowest point
The two-year Treasury yield, sensitive to policy expectations, hovered near a five-month bottom at 3.4966%. The benchmark 10-year was likewise near a five-month trough at 4.0494%. The 10-year Treasury yield eased to 4.04% from 4.10% late Friday and from 4.28% last Tuesday.
Commodities were mixed. In energy trading, benchmark U.S. crude rose 25 cents to $62.51 a barrel, and Brent crude gained 27 cents to $66.29.
Gold notched another record on Tuesday as traders ramped up bets on multiple Fed cuts this year.
Spot bullion rose as much as 0.3% to a new all-time high above $3,647 an ounce, topping Monday’s peak as noted by Cryptopolitan
The metal had climbed 2.5% over the previous two sessions after Friday’s surprisingly weak payrolls led markets to price in three cuts this year, including a quarter-point move at next week’s Fed meeting. Because gold does not pay interest, it often benefits when borrowing costs fall.
The rally has lifted gold nearly 40% this year, supported by purchases from central banks, expectations of easier policy, safe-haven demand amid geopolitical strains, and concern about the impact of President Donald Trump’s tariff regime on the world economy.
As of 9:51 a.m. in Singapore, bullion traded at $3,645.61 an ounce.
Global Bond index jumps 20% since 2022
A widely followed gauge has surged more than 20% from its 2022 low as softer U.S. labor data reinforced the case for faster Fed easing.
“Curves have been highly directional and that too has brought about a grab for yield, that perhaps also was driven by fairly significant shorts placed in the US market as seen in surveys,” said Martin Whetton, head of financial markets strategy at Westpac Banking Corporation.
Even with the recovery, longer-dated debt faces pressure from fiscal concerns.
France’s prime minister has warned of a debt crisis as the government faces strain, while in the UK investors are waiting for Chancellor Rachel Reeves’s November plan to balance growth measures with spending restraint.
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