SYDNEY -Asian stocks firmed on Monday ahead of central bank meetings that are widely expected to deliver two more rate cuts and key U.S. inflation figures that should flash a green light for more easing there.
More than 20 billion shares changed hands on U.S. exchanges on Friday, the busiest session since January 2021. Analysts at BofA noted the S&P rises an average of 21% when there is no recession in the 12-months after the start of Fed cuts. "We note that initiating a cycle with a 50bp move without an imminent financial crisis or jobs actually being lost is quite unusual for the Fed," he added."We thus think the step reveals the Fed's determination to avoid a deterioration in labour market conditions, or, in market jargon: to achieve a soft landing."
The Swiss National Bank meets Thursday and markets are fully priced for a quarter-point cut to 1.0%, with a 41% chance it will ease by 50 basis points. Investors were also keeping a wary eye on negotiations to avoid a U.S. government shut down with just days before the current $1.2 trillion in funding runs out on Sept. 30. Republican U.S. House of Representatives Speaker Mike Johnson on Sunday proposed a three-month stopgap funding bill but now it has to go to vote.