Sensex Today Live Updates : Asian equities tracked gains on Wall Street as the latest US inflation data reinforced bets for Federal Reserve interest-rate cuts.
Shares in Australia, South Korea and mainland China climbed, while those in Hong Kong reopened with gains after a holiday. Japanese stocks mostly rose but pared earlier gains. Futures contracts for the S&P 500 and Nasdaq 100 also edged higher in Asia after both benchmarks rose more than 1% to touch fresh highs on Wednesday.
Australian and New Zealand government bonds rallied as Treasuries extended gains from the prior session that pushed yields lower across the curve. The US 10-year rate fell 10 basis points on Wednesday, while the policy-sensitive two-year yield dropped nine basis points as investors brought forward interest rate cut expectations. The swaps market is now predicting two reductions this year, up from one earlier in the year.
The Bloomberg dollar index fell to a one-month low as the currency weakened against all its Group-of-10 peers, tracking the decline in yields.
The yen traded at the highest level in over a week against the dollar, adding to Wednesday’s 1% advance. The stronger Japanese currency came even as data showed the economy contracted in the first quarter, with private consumption and capital spending both retreating.
Elsewhere, the Australian dollar erased gains after the country’s jobless rate for April missed the median estimate in a Bloomberg survey.
The so-called US core CPI — which excludes food and energy costs — climbed 0.3% from March, in line with consensus expectations but snapping a streak of three above-forecast readings which spurred concern that inflation was becoming entrenched. The year-over-year measure cooled to the slowest pace in three years.
“The soft landing is continuing to play out,” said Jeffrey Schulze, head of economic and market strategy at ClearBridge Investments. “The latest print should begin to shift the narrative back towards ‘when’ the Fed will cut in 2024 rather than ‘if’,” he said.
“We see the April print as consistent with a direction of travel for inflation dynamics that – in the context of moderation in the real economy – can yield a September cut followed by a second in December,” said Krishna Guha at Evercore.
The latest inflation report may offer US policymakers hope that inflation is resuming its downward trend, which would help pave the way for rate cuts. Separate retail sales data indicated some softening of the resilient consumer demand that’s been bolstering the economy.
The next CPI figures will be released exactly on the same day when the Fed meets to decide on interest rates — June 12.
Fed Bank of Minneapolis President Neel Kashkari repeated the central bank likely needs to keep rates at the current level for “a while longer,” and questioned how much they’re restraining the US economy.
In corporate news, Boeing Co. faces possible criminal prosecution after the US Justice Department found the company violated a deferred-prosecution agreement tied to two fatal crashes half a decade ago. Walt Disney Co. Chief Executive Officer Bob Iger said marketing expenses at the flagship Disney streaming service are too high and will be cut.
Data set for release in Asia includes industrial output for Japan and a monetary policy decision in the Philippines.
Oil edged higher on a bigger-than-expected draw in commercial crude stockpiles. Gold prices also climbed early Thursday, placing the precious metal on pace for its third daily advance.
Sensex Today Live : Strong global cues likely to drive Indian markets higher today
Sensex Today Live : Indian shares are set to open higher on Thursday, tracking a rally in global equities after a softer-than-expected U.S. consumer inflation print raised expectations of at least two interest rate cuts in 2024.
The Gift Nifty was trading at 22,386.50 as of 8:19 a.m. IST, indicating that the Nifty 50 will open above Wednesday’s close of 22,200.55.
Asian stock markets rallied on Thursday, buoyed by Wall Street’s surge to all-time peaks overnight after a milder U.S. inflation report raised expectations the Federal Reserve will deliver at least two rate cuts this year.
The dollar remained on a downtrend, sagging to fresh multi-week lows against peers including the euro and sterling.
U.S. Treasury yields extended their retreat in Tokyo trading, sinking to new six-week troughs. That helped the beaten-down yen to continue its recovery, even as data showed the Japanese economy contracted more than expected in the first quarter.
Gold marched back toward record levels, and crude oil added to gains after rebounding strongly overnight from a two-month trough.
U.S. data on Wednesday showed the consumer price index (CPI) rose by 0.3% in April, below an expected 0.4% gain, raising hopes that the Federal Reserve can cut interest rates twice this year.
Fed funds futures show 52 basis points of cuts this year, with one in September now fully priced.
The data provided palpable relief to markets after higher-than-expected U.S. consumer prices in the first quarter had led to a sharp paring of rate cut bets, and even stoked some worries of an additional hike.
“The expression of relief ripples through risky assets, with markets coming alive the moment we saw U.S. core CPI,” Chris Weston, head of research at Pepperstone, wrote in a report.
“All in all, after three months of troubling price pressures, this is a report that will sit well with (Fed Chair) Jay Powell and co.”
MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 1.44%. Hong Kong’s Hang Seng advanced 0.9%, while Australia’s stock benchmark rallied 1.5%.
Japan’s Nikkei initially jumped as much as 1.3% but pared those gains to be up 0.6% amid pressure from some disappointing late earnings on the final day of the reporting season on Wednesday, and jitters over the sharp rally for the yen.
Japan’s currency was a standout on Thursday, outpacing gains against the dollar among major peers.
The dollar was last down 0.63% at 153.91 yen, from as high as 156.55 in the previous session.
The 10-year U.S. Treasury yield, which the dollar-yen pair tends to track, slipped to 4.705% for the first time since April 5.
The dollar index, which measures the currency against the yen, euro, sterling and three other rivals, weakened 0.07% to a five-week low of 104.12.
The euro rose to $1.08925, the highest since March 21, and sterling reached $1.2697 for the first time since April 10.
Also benefitting from broad dollar weakness, leading cryptocurrency bitcoin marked a fresh three-week top at $66,694.89 following Wednesday’s more than 7% advance.
“It’s hard to go past the move in crypto,” said Pepperstone’s Weston.
“The 23 April swing high of $67,252 is the near-term target and the level to watch,” he added. “A break here and we will likely see traders chasing this move for a push into 70k.”
Gold gained 0.39% to $2,395.39, pushing toward the all-time peak of $2,431.29 from April 12.
Brent futures rose 42 cents, or 0.5%, to $83.17 a barrel, while U.S. West Texas Intermediate crude (WTI) gained 43 cents, or 0.6%, to $79.06, adding to Wednesday’s strong gains.
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