Asian Shares Rise Ahead of Key Data Releases
By Wayne Cole
SYDNEY (Reuters) – The start of the week saw Asian shares making cautious gains, with investors eyeing upcoming inflation data that could potentially set the stage for rate cuts in the United States and Europe. The dollar and bond yields also retreated in anticipation of these key releases.
Oil prices ticked up by 0.7% following tensions between Israel and Hezbollah over the weekend, sparking concerns about potential supply disruptions if the situation escalates. Brent crude rose 51 cents to $79.53 a barrel, while WTI added 50 cents to $75.33 per barrel.
All eyes are on the highly anticipated earnings report from Nvidia (NASDAQ:) on Wednesday, with expectations running high in the market. Nvidia’s stock has surged 150% year-to-date, contributing significantly to the market’s gains.
Chris Weston, head of research at broker Pepperstone, commented, “Nvidia is known to beat consensus expectations, but investors are hoping for revenue numbers that could trigger a significant market reaction.”
With Nasdaq futures slightly down, MSCI’s Asia-Pacific index outside Japan edged 0.4% higher, while South Korea saw a 0.3% increase in shares. The yen’s strength against the dollar put pressure on Japanese exporter stocks.
The dollar weakened against the yen following comments from Federal Reserve Chair Jerome Powell hinting at a shift towards policy easing. Powell’s focus on safeguarding the labor market raised expectations for rate cuts at the upcoming Fed meeting.
As market participants anticipate U.S. personal consumption and core inflation data later in the week, analysts are optimistic about the possibility of rate cuts in September. Fed fund futures reflect a high likelihood of a quarter-point cut and even suggest the potential for a 50 basis points move.
Gold prices benefited from the softer dollar and lower bond yields, hovering near all-time highs at $2,516 an ounce. The euro also climbed to $1.1190, while the Swiss franc held steady against the dollar.
