Following last week’s strong performance, Asian markets mostly rose on Monday as traders focused on a closely watched meeting of central bank governors, at which Jerome Powell of the US Federal Reserve will deliver a key speech.
Investors appear to have overcome the turmoil that plagued trading markets earlier this month after a series of data suggested that fears of a US recession were overblown.
Powell’s speech at the annual symposium in Jackson Hole, Wyoming – which also brings together financial leaders and policy makers – will be closely watched in hopes that he will announce a rate cut at the Fed’s meeting next month.
“Investors and analysts alike will be paying close attention to any signals from Fed officials on the future direction of U.S. interest rates,” said Luca Santos, currency analyst at ACY Securities.
“There is growing speculation that … Powell is hinting at the possibility of starting to cut interest rates as early as September. However, the extent of the cut is still uncertain.
“A modest 25 basis point reduction seems likely, but a larger 50 basis point cut would require stronger evidence of a slowdown in the U.S. labor market.”
All three major Wall Street indexes rose on Friday, returning to near the record highs they hit before their August 5 collapse, as investors grow more confident that the US economy will avoid a recession as a result of the Fed’s interest rate cuts.
Most Asian markets took the lead on Monday.
Hong Kong rose by more than one percent, while Shanghai, Sydney, Taipei, Manila and Jakarta also saw gains, but Seoul, Singapore and Wellington declined. Tokyo remained unchanged.
Gold prices remained above $2,500 after breaking through that mark for the first time on Friday, amid expectations of Fed interest rate cuts that would make the precious metal more attractive to investors.
And oil prices barely moved after last week’s losses, which were due to demand concerns as China’s economy struggles to recover.
Investors are also closely following ceasefire negotiations between Israel and Hamas in the Gaza Strip, fearing a broader war in the oil-rich Middle East.
Major oil producer Iran has threatened retaliation against Israel for the assassination of Hamas politician Ismail Haniyeh in Tehran last month, a killing widely blamed on Israel.
US Secretary of State Antony Blinken was scheduled to meet with Prime Minister Benjamin Netanyahu and other Israeli leaders on Monday to try to restart the process of ending hostilities.
– Key figures at 02:30 GMT –
Tokyo – Nikkei 225: Flat at 38,047.17 (breakthrough)
Hong Kong – Hang Seng Index: Increase of 1.4 percent to 17,680.97
Shanghai – Composite: Plus 0.7 percent to 2,898.72
Euro/Dollar: Rise to 1.1031 USD from 1.1022 USD on Friday
Pound/Dollar: Rise to $1.2950 from $1.2945
Dollar/Yen: Down to 147.54 yen from 147.60 yen
Euro/pound: Increase from 85.14 pence to 85.19 pence
West Texas Intermediate: unchanged at USD 75.57 per barrel
North Sea Brent oil: Increase of 0.1 percent to USD 79.73 per barrel
New York – Dow: Plus 0.2 percent to 40,659.76 (closing)
London – FTSE 100: 0.4 percent less to 8,311.41 (closing price)
dan/smw
FOX28 Spokane©
