HONG KONG, Jul 11 (Reuters) – Asian stocks rallied on Tuesday and the safe haven dollar fell on Tuesday as investors hoped this week’s US inflation data would support an impending end to rate hikes and welcomed the prospect of China’s economic stimulus to support the stagnation. grow.
Markets are awaiting US inflation data expected on Wednesday to see if price pressures ease further, which could provide clues about the interest rate outlook.
Early in the Asian trading day, MSCI’s broadest index of Asia-Pacific stocks outside Japan (.MIAPJ0000PUS) rose 0.7%, while US stock futures, the S&P 500 e-minis, rose 0.06%.
Investors on Monday digested comments from several Federal Reserve officials who said that while additional rate hikes are needed to curb inflation, the current tightening cycle of the central bank’s monetary policy is nearing its end.
“US CPI will enter the picture, with associated event risk potentially adding to the mood,” ANZ analysts said in a note.
Australian equities (.AXJO) rose 1.01%, while Japan’s Nikkei stock index (.N225) rose 0.66%.
China’s blue-chip CSI300 index (.CSI300) was up 0.4% in early trading. The Hong Kong Hang Seng Index (.HSI) opened 1.03%.
Data showing a stronger-than-expected drop in Chinese producer prices on Monday suggests the country’s “post-COVID recovery has picked up steam,” but added expectations that “policymakers may need to do more to manage demand.” support,” said ANZ analysts.
On Monday, US stocks closed higher after last week’s losses as comments from Fed officials confirmed the view that the US central bank may be at the end of its tightening cycle.
On Wall Street, the Dow Jones Industrial Average (.DJI) was up 0.62%, the S&P 500 (.SPX) was up 0.24% and the Nasdaq Composite (.IXIC) was up 0.18%.
Shares of Intel (INTC.O) rose 2.8% and an index of semiconductors (.SOX) rose 2.1%.
S&P 500 corporate earnings will kick off this week with reports from some major US banks. Analysts expect second-quarter earnings to be down 6.4% year over year, according to Refinitiv IBES data.
In US Treasuries, the yield on benchmark 10-year Treasuries reached 4.0018% compared to the US closing price of 4.006% on Monday. The two-year yield, rising on traders’ expectations of higher Fed fund rates, reached 4.8639% compared to a US closing rate of 4.862%.
The Fed’s comments pushed the greenback to a two-month low of 101.88 against a basket of currencies in early Asian trading as investors revised expectations about how much US interest rates have yet to rise.
The Japanese yen rose to a near-month high of 141.15 per dollar on Tuesday and last bought at 141.43 per dollar, buoyed by a fall in US Treasury yields.
US crude rose 0.55% to $73.39 a barrel. Brent crude rose to $78.04 a barrel.
Gold was slightly higher. Spot gold was trading at $1925.63 an ounce.
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