A gauge of Asian stocks headed to their highest close in more than three weeks, supported by gains in Hong Kong, Japan and Australia. Sony Group Corp rose 5.1% in Tokyo after Goldman Sachs Group Inc. Her recommendation to buy from the neutral. US stock futures rose.
Technology stocks rose in Hong Kong for the fourth day after Chinese Premier Li Qiang Met with senior executives of the country’s leading technology companies on Wednesday. The news added to optimism that the government will end its crackdown on the industry amid a weak economy.
The dollar gauge added to Wednesday’s drop of 0.9%, dropping to its lowest level in more than a year. The yen was little changed after rising 1.3% against the dollar the day before, while the offshore yuan fell. Emerging market currencies rebounded, with the South Korean won leading the gains.
Some senior money managers said the greenback is on guard More losses With the waning of American exceptionalism.
“Broadly, we can probably assume that the US dollar has peaked and there may be room for other currencies to do better in the latter half of 2023-2024,” said Brad Gibson, co-head of fixed income Asia Pacific at AllianceBernstein.
Treasury yields extended their declines in the Asian hours. The yield on two-year Treasury notes, which is more sensitive to impending policy moves, fell four basis points to 4.71%, after falling 13 basis points on Wednesday on inflation data.
Australia’s three-year yield decreased by 10 basis points. New Zealand government bond yields also fell.
US Consumer Price Index fell to 3% in June on an annual basis, down from 4% in May. The core measure — which economists see as the better indicator of core inflation — fell to 4.8%, the lowest level since 2021. While traders anticipate the Fed will continue to raise interest rates again this month, the possibility of further increases appears to be receding.
The inflation data pushed the S&P 500 to its highest closing level since April 2022. The high-performance tech Nasdaq 100 outperformed, jumping 1.2%.
Brandywine Global Investment Management expects the Fed to tighten by 25 basis points this month and then stop. “We’ve outgrown that kind of crisis mentality with respect to inflation,” portfolio manager Jack McIntyre told Bloomberg TV. “The rhetoric from the Fed after the FOMC meeting should be much less hawkish.”
Investors will also be watching trade data from China later on Thursday. That could boost calls for more political support for the economy, according to Eric Chu of Bloomberg Economics.
Elsewhere, Oil extended gains amid optimism that the Fed’s rate hike cycle is coming to an end. Gold hasn’t changed a bit. DM