Asian Markets Rebound: In Asian markets, shares followed the positive trend of Wall Street futures, driven by Amazon’s earnings performance. Bond markets also maintained their rally as signs of easing U.S. inflation emerged. U.S. statistics is likely to show a 0.3% increase in core inflation for September, lowering the annual rate from 3.9% to 3.7%.
The euro fell to a two-week low as the European Central Bank maintained interest rates. The dollar remained over 150 yen, with market watchers watching for Bank of Japan intervention before next Tuesday’s policy meeting.
S&P 500 futures were up 0.4%, and Nasdaq futures rallied 0.7%, largely due to a 5% surge in Amazon shares during after-hours trading. In their statement, the tech giant predicted higher holiday season sales and a stabilization in its cloud business.
MSCI’s Asia-Pacific index outside Japan rose 0.6% after hitting an 11-month low the day before. However, a 1.2% weekly loss is still expected. Tokyo’s Nikkei increased 1% but down 1.2% for the week. Chinese blue-chip stocks were flat, while Hong Kong’s Hang Seng rose 1%.
U.S. data affirmed a resilient economy with easing inflation, fueling hopes of a soft landing. The U.S. economy saw almost 5% growth in the third quarter, but a slowdown is expected from here. Eyes are on underlying inflation, which significantly subsided last quarter, raising expectations that the closely watched U.S. personal consumption expenditures (PCE) data for September will also show lower inflation levels.
Also Read: China Boost Fades: Asian Markets Feel the Chill as U.S. Economic Indicators Loom
Goldman Sachs has adjusted its PCE forecasts downward, reducing the estimates for both core and headline PCE. The CME FedTool indicated that the probability of a rate hike in November has been eliminated, and bets on a December hike have been reduced to 19.8% from 29.3% a day earlier. Rate cuts for the next year are seen at around 70 basis points.
The 10-year Treasury yield increased by 2 basis points to 4.8657% after a 10 basis point drop overnight. It had breached 5% earlier in the week for the first time in 16 years. The yen reached a one-year low of 150.77 per dollar before settling at 150.31. It was not far from the three-decade low of 151.94 touched in October last year, which prompted Japanese authorities to intervene in the currency market.
Speculation about the BOJ potentially raising an existing yield cap at its upcoming meeting is keeping traders watchful. Gold prices remained steady at $1,985.79 per ounce, not far from a 2-1/2 month high reached earlier this month, as investors sought safe-haven assets amid ongoing Middle East conflicts.
Oil prices were higher on Friday, recovering after a more than $2 drop in the previous session. However, they are set for their first weekly decline in three weeks as concerns about the Israel-Gaza conflict spreading and disrupting oil supplies eased. Brent crude futures rose 0.5% to $88.38 a barrel, and U.S. West Texas Intermediate was at $83.58 a barrel, up 0.4%.
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What are Asian markets doing right now?
The Nikkei Index, Hang Seng Index, and S&P BSE SENSEX Index are all trading lower. The Nikkei Index is down 75.45 points at 33,464.17, the Hang Seng Index is down 142.14 points at 16,646.41, and the S&P BSE SENSEX Index is down 535.88 points at 71,356.60.