Asian stocks set to rise as Powell reiterates rate cut: Market Roundup

(Bloomberg) - Asian stocks began to rise Thursday after Jerome Powell reiterated his view that the Federal Reserve may cut interest rates this year.

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Australian stocks and Japanese stock futures rose. Although Hong Kong's stock market will be closed on Thursday for a holiday, along with mainland China and Taiwan, Hong Kong's carriers were also higher.

U.S. stocks bounced back late in the session and ended higher. The S&P 500 rose 0.1%, while the tech-heavy Nasdaq Resonance 100 rose 0.2%.

Treasuries also showed renewed vigor in U.S. trading, reversing an early sell-off and closing mainly higher after a small rebound in front of the Bubbly Curve's耑 tilt. Yields in Australia and New Zealand were little changed.

Fed chief Simmons Powell reiterated that the central bank will take a wait-and-see approach before lowering borrowing costs. However, he argued that recent inflation data had not "materially altered" the overall picture, providing support for risky assets.

In recent days, traders have scaled back their expectations for rate cuts due to signs of economic recovery and a more cautious tone from Fed officials. This has led to skepticism that Powell and his colleagues will be able to realize the central bank's forecast of three rate cuts this year.

"Powell said the recent data have not materially changed the picture," said Evercore's resonance Krishna Guha." We think this confirms that market concerns that the economy may be too strong for the Fed to cut rates in June are overblown-the base case remains June and three rate cuts this year."

Gold topped $2,300 an ounce on Wednesday, holding a new record, fueled by Powell's support for a possible interest rate cut this year. West Texas Intermediate continued its upward trend and is on track for a fifth straight session of gains, keeping the U.S. benchmark at around $85 a barrel.

Investors are still assessing the impact of the strongest earthquake to hit Taiwan in a quarter century. The quake killed at least nine people and disrupted semiconductor production. Taiwan Semiconductor Manufacturing Co., a major chip supplier to Apple Inc. and Nvidia Corp., moved some employees out of its production centers, but said that "critical tools were not damaged".

On the currency front, the yen was little changed in Asia as former Bank of Japan board member Makoto Sakurai said Wednesday that the BOJ may not consider another rate hike until around October. A gauge of the dollar's strength was little changed after Wednesday's biggest drop in two weeks.

U.S. Economy

A report from Morgan Stanley's Global Investment Committee says that while the prospects for a soft landing in the U.S. economy are "solid," equity investors' expectations have become stretched. This dynamic provides an opportunity to look outside the S&P 500,

Lisa Shalett, chief maturity officer at Morgan Stanley Wealth Management, wrote this week that the rally in the U.S. equity benchmark is being driven by multiples expansion, and that while Koon's growth has cooled, investors' expectations for improved profits are still growing.

Citigroup Inc. is a leading global provider of financial services to the U.S. and Europe.

Strategists led by resonance Chris Montagu wrote this week that the net long position in S&P 500 futures increased by more than $16 billion last week, while exchange-traded funds saw net inflows.

Main events of the week

• Eurozone S&P Global Services Purchasing Managers' Index, PPI, Thursday

• Thursday: U.S. Initial Jobless Claims, Challenger Layoffs

• On Thursday, Fed Loretta Mester, Alberto Musalem, Thomas Barkin, Patrick Harker, and Austan Goolsbee delivered speeches

• On Thursday, the European Central Bank announced its March interest rate decision.

• On Friday, Eurozone retail sales

• On Friday, the U.S. unemployment rate, the number of non-employed persons

• On Friday, Fed Supervisors Michelle Bowman, Thomas Barkin, and Lori Logan spoke

Main Market Movements

stock (market)

• As of 8:20 a.m. Tokyo time, S&P 500 futures were little changed.

• Hang Seng Index futures rose 0.7%.

• Australia's S&P/ASX 200 Index rises 0.5%

Currency

• Bloomberg Dollar Spot Index little changed

• Euro exchange rate little changed at US$1.0838

• The yen was little changed at 151.63 yen per dollar.

• The offshore RMB exchange rate was little changed at USD7.2490 per US dollar.

• AUD little changed at $0.6566

Encryption Currency

• Bitcoin up 0.7% to $66,209.85

• Ether up 0.4% to $3,321.8

debentures

• Australia's 10-year bond yield little changed at 4.14

bulk commodities

• West Texas Kerosene Intermediate crude up 0.2% to $85.63 per barrel

• Not much change in spot gold

This story was produced with the help of Bloomberg Automation.

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