By Stella Qiu
SYDNEY (Reuters) – Asian shares were mixed on Tuesday after rallying in the previous session, as rising expectations of an impending European rate cut helped boost risk appetite ahead of some key inflation data.
A slew of European Central Bank officials said the ECB has room to cut rates overnight as inflation slows, underscoring expectations for a June 6 rate cut. With the debate now shifting to next steps, markets have fully priced in two rate cuts by October this year. year.
That helped stock futures on Wall Street ahead of the reopening of U.S. markets after a holiday. S&P 500 futures rose 0.1% and Nasdaq futures rose 0.2% before a series of Federal Reserve speakers gave final guidance on the interest rate outlook later in the day.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4%, thanks to a 0.7% rise in Hong Kong’s Hang Seng index, after rising 0.9% on Monday.
Japan’s Nikkei, on the other hand, fell 0.3%, reversing some of the 0.7% gain a day ago.
“We’re heading into the summer season in the Northern Hemisphere, which is traditionally a time when markets go into drift mode. We’re past earnings season,” said Tony Sycamore, an analyst at IG.
“To find a driver it has to be something out of left field and instead we see the markets generally moving higher and I think that’s what we’re seeing at the moment.”
China’s blue chips lost 0.1% after rising 1% a day earlier as technology shares surged on Beijing’s further commitment to invest in its semiconductor industry. [.SS]
This week’s big risk events won’t happen until Friday, when US major personal consumption expenditures (PCE) data – the Federal Reserve’s preferred inflation measure – and eurozone inflation data will set the tone.
In currency markets, the dollar trailed for the third straight session as traders positioned for the PCE release. Average forecasts are for a 0.3% increase in April, keeping the annual pace at 2.8%, with downside risks.
The Japanese yen held steady at 156.80 per dollar, just slightly stronger than the key 157 level. However, the currency continued to weaken against a slew of high-yielding currencies, with the New Zealand dollar hitting a new 17-year high of 96 on Tuesday. reached 56 yen. [FRX/]
Strong carry demand helped the kiwi hit a 2.5-month high of $0.6155.
The cash government bond market returned from a holiday with little movement after taking a hit last week.
The two-year yield fell 1 basis point to 4.9396%, after rising 13 basis points the week before, while the ten-year yield remained at 4.4649%, after rising 5 basis points the week before.
Oil prices were largely stable on Tuesday. Brent futures rose 0.1% to $83.19 a barrel. [O/R]
Gold prices rose 0.1% for a third day to $2,354.23 per ounce.
(Reporting by Stella Qiu; Editing by Jacqueline Wong)
