Asian stocks rise, dollar falls as ECB comments boost risk appetite

By Stella Qiu

SYDNEY (Reuters) – Asian stocks edged higher on Tuesday while the dollar remained lower for a third straight session, as heightened expectations of an imminent European rate cut helped whet risk appetite.

Gains were limited ahead of key inflation figures this week.

Europe is expected to see a slightly stronger open, with EUROSTOXX 50 futures up 0.2%. That would build on overnight gains after a slew of European Central Bank officials said the ECB had room to cut interest rates as inflation slowed.

With the debate now shifting to further moves, markets have fully priced in two rate cuts between now and October this year. That in turn guided Wall Street stock futures higher ahead of the reopening of U.S. markets after a holiday.

S&P 500 futures rose 0.1% and Nasdaq futures rose 0.2%.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.2% after rising 0.9% on Monday. Taiwanese stocks climbed 0.5% to a record high, while Hong Kong’s Hang Seng index pared earlier gains to 0.1%.

Japan’s Nikkei, on the other hand, slipped 0.2%, reversing part of its 0.7% advance 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,” said Tony Sycamore, an analyst at IG.

Sycamore believes that the Hang Seng has risen further after a recent rise, as the data is likely to support further improvements in the Chinese economy. China will publish its surveys on manufacturing and services activity for the month of May on Friday.

“I like the idea of ​​getting back into this market in the event of downturns and that’s something that I think has increased further, whereas the Nikkei, in my opinion, has some question marks hanging over this now. walk.”

He added that the Nikkei has failed to return to its March high and there are signs that market participants are starting to move money out of the benchmark to invest in Chinese markets.

This week’s major risk events won’t be expected until Friday, when U.S. figures on core personal consumption expenditures (PCE) – the Federal Reserve’s preferred inflation measure – and inflation data from the Eurozone will set the tone for trade.

In foreign exchange markets, the dollar was lower for a third straight session, last down 0.1% against its major peers, as traders awaited the PCE release.

The median forecast for April is an increase of 0.3% from the previous month, while one-year expectations are for an increase of 2.8%, with risks to the downside.

The Japanese yen stabilized at 156.78 per dollar, just slightly above 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/)

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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 1.6 basis points to 4.9375%, after jumping 13 basis points the previous week, while the 10-year yield slipped 1 basis point to 4.4610 %, after increasing by 5 basis points the previous week.

Oil prices extended their gains from the previous session. Brent crude futures rose 0.2% to $83.23 a barrel. U.S. crude futures for July were at $78.84 a barrel, up 1.4% from Friday’s close, after trading during the U.S. holiday.

Gold prices climbed for a third day, up 0.1% to $2,352.20 an ounce.

(Reporting by Stella Qiu; editing by Jacqueline Wong and Edwina Gibbs)