Source: AFP
Asian markets opened Tuesday mostly lower after record gains last week, with investors eyeing the release of new economic data this week that could provide a better sense of when central banks may cut interest rates.
Last week’s rallies – including an all-time record for the Tokyo benchmark – were fueled by steady gains from US chip titan Nvidia, a campaign on artificial intelligence.
But U.S. markets fell on Monday and Asian stocks started the week with a “more cautious attitude,” Stephen Innes, chief executive of SPI Asset Management, said in a note.
“This subdued tone suggests a moderation in investor sentiment following the recent technology-driven buying spree,” he said.
Investors are looking to the Fed’s preferred measure of inflation, the US Personal Consumer Expenditure (PCE) price index due on Thursday, as well as comments from several Fed officials on Wednesday and Friday, which Innes said could to provide information on the central bank interest rate. cropped perspective.
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Expectations of when the Fed might start cutting rates have gradually shifted to the second half of the year as inflation data has picked up and policymakers say they need to see more signs that it is moving toward its 2 .0%.
“Economics will come back into focus,” Morgan Stanley’s Chris Larkin at E*Trade told Bloomberg.
“After warmer-than-expected (consumer price index) and (producer price index) readings earlier this month, more people may be looking to the PCE for information about the threat of inflation — and how it might affect the Fed’s timing for interest rate cuts.”
In Asia, Tokyo stocks rose at the open on Tuesday, helped by a slightly cheaper yen and a rise in U.S. chip-linked stocks, according to Monex senior market analyst Toshiyuki Kanayama.
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Analyst Takuma Ikemoto of Tokai Tokyo Research Institute said in Tokyo that bargain hunting is shifting from chip-related stocks to other major stocks.
New government data showed on Tuesday that Japanese consumer inflation slowed for a third straight month to 2.0% in January.
The better-than-expected reading fueled speculation that the Bank of Japan may raise interest rates “as early as next month, although April remains the favorable timeframe,” Innes said.
“Prevailing theory suggests that the BOJ may find it easier to proceed with policy normalization, with inflation overshooting the target.”
Unlike other major central banks that have raised interest rates in an attempt to reduce inflation, the BoJ has stuck to its ultra-loose policy, putting pressure on the yen.
Shanghai stocks rose on Tuesday, while Hong Kong fell.
Sydney, Seoul, Mumbai, Taipei, Singapore, Jakarta, Bangkok, Manila and Wellington also traded lower.
According to the PCE data, investors will turn to Chinese manufacturing numbers due on Friday.
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Keys around 02:30 GMT
Tokyo – Nikkei 225: UP 0.2 percent at 39,303.61
Hong Kong – Hang Seng Index: DOWN 0.4 percent at 16,565.62
Shanghai – Composite: UP 0.3 percent to 2,985.87
EUR/USD: DOWN at $1.0852 from $1.0853 on Monday
Dollar/yen: DOWN to ¥150.49 from ¥150.70
GBP/USD: DOWN to $1.2679 from $1.2684
Euro/pound: UP to 85.59 pence from 85.54 pence
North Sea Brent crude: UP 0.1% to $82.44 a barrel
West Texas Intermediate: DOWN 0.1% to $77.50 a barrel
New York – Dow: DOWN 0.2 percent at 39,069.23 (close)
London – FTSE 100: Down 0.3% to 7,684.30 (close)
Source: AFP