By Stella Qiu
SYDNEY (Reuters) – Asian stocks were mixed on Tuesday after rebounding in the previous session, as growing bets on an imminent European rate cut supported risk appetite ahead of some key inflation data.
Many European Central Bank officials said overnight that the ECB had the option to cut interest rates as inflation slows, underscoring expectations of a rate cut on June 6. As the debate now turns to subsequent measures, markets have fully priced in two rate cuts by October of this year.
That helped Wall Street stock futures ahead of U.S. markets reopening after a holiday. S&P 500 futures rose 0.1% and Nasdaq futures gained 0.2% ahead of a slate of Federal Reserve speakers later in the day for the latest guidance on rate outlook.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4%, led by a 0.7% gain in Hong Kong’s Hang Seng index, after gaining 0.9% Monday.
Japan’s Nikkei, on the other hand, slipped 0.3%, reversing part of the 0.7% advance from a day ago.
“We’re heading into the Northern Hemisphere summer season. Traditionally, this is a time when markets tend to go into drift mode. We’re done with earnings season,” said Tony Sycamore, an analyst at IG .
“To find a driver, it has to be something that comes out of left field and instead we typically see markets drift higher and I think that’s what we’re seeing right now.”
China’s blue chip stocks lost 0.1% after firming 1% a day earlier, as technology stocks jumped following Beijing’s additional pledge to invest in its semiconductor industry. (.SS)
This week’s major risk events won’t occur until Friday, when U.S. core personal consumption expenditure (PCE) figures – the Federal Reserve’s preferred inflation measure – and inflation data from the Eurozone will set the tone for trade.
On the foreign exchange markets, the dollar was down for the third consecutive session as traders positioned themselves for the publication of the PCE. Median forecasts call for an increase of 0.3% in April, maintaining the annual pace at 2.8%, with downside risks.
The Japanese yen stabilized at 156.80 per dollar, just slightly stronger than the key level of 157. However, it continued to weaken against a large number of high-yielding currencies, the neo-dollar Zealand having reached a new 17-year high on Tuesday at 96.56 yen. (FRX/)
Thanks to strong carry demand, the kiwi reached a 2.5-month high of $0.6155.
The spot Treasury market returned from vacation with little movement after taking a hit last week.
Two-year yields fell 1 basis point to 4.9396%, after jumping 13 basis points the previous week, while the 10-year yield held steady at 4.4649%, after rising by 5 basis points the previous week.
Oil prices were generally stable on Tuesday. Brent crude futures rose 0.1% to $83.19 a barrel. (OR)
Gold prices climbed for a third day, up 0.1% at $2,354.23 an ounce.
(Reporting by Stella Qiu; editing by Jacqueline Wong)
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