Oddbean

Asia stocks rally on renewed global rate cut optimism ========== Asia stocks rally on renewed global rate cut optimism. Asia-Pacific shares outside Japan rose 0.66% and was on course for a nearly 1% gain for the week, its third straight week of gains. Japan's Nikkei was 1.6% higher. China stocks also gained, with blue-chip shares 0.14% higher, while Hong Kong's Hang Seng Index rose 1.4%, having touched an eight month high in early trading. Data on Thursday showed U.S. initial claims for state unemployment benefits increased more than expected by 22,000 to a seasonally adjusted 231,000 for the week ended May 4. Markets will be closely watching April U.S. Producer Price Index (PPI) and the Consumer Price Index (CPI) out next week for signs that inflation has resumed its downward trend towards the Fed's 2% target rate. Traders now anticipate 47 bps of cuts this year from the Fed, drastically lower than the 150 bps they priced in at the start of 2024. The shifting expectations around U.S. rates have kept the dollar adrift, with the euro holding to its 0.3% overnight gains and last at $1.0778. The single currency was on track for its fourth straight week of gains on the dollar. BOE Governor Andrew Bailey said there could be more reductions than investors expect, with central bank's move was the latest sign of the growing divergence between Europe and U.S. rate outlook, with interest rates expected to fall earlier and further across Europe than in the United States. The yen remains in the spotlight after last week's suspected rounds of interventions from Japanese authorities. It was last at 155.51 per dollar, with Japan's Finance Minister Shunichi Suzuki repeating Tokyo's recent warnings that it was ready to take action against disorderly currency moves. In commodities, oil prices were on the rise, with U.S. crude up 0.63% to $79.76 per barrel and Brent at $84.33, up 0.54% on the day. Spot gold added 0.3% to $2,352.92 an ounce. #AsiaStocks #GlobalRateCut #Optimism https://m.economictimes.com/markets/stocks/news/asia-stocks-rally-on-renewed-global-rate-cut-optimism/articleshow/109994673.cms