Asian Stocks to Mirror US Rally as Inflation Slows: Markets Wrap

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Basis Points,Interest Rates,The Federal Reserve

(Bloomberg) -- Equities in Asia were set to rally Thursday after US stocks and bonds climbed on slowing inflation data, providing room for the Federal...

Futures for Australian and Japanese equities rose. The S&P 500 climbed 1.2% and the Nasdaq 100 advanced 1.5% to place each benchmark at fresh highs. Hong Kong shares will resume trading on Thursday after a holiday.Australian and New Zealand government bonds rallied Thursday following gains in Treasuries which pushed yields lower across the curve.

“We see the April print as consistent with a direction of travel for inflation dynamics that – in the context of moderation in the real economy – can yield a September cut followed by a second in December,” said Krishna Guha at Evercore. “The market likes it,” said Gary Pzegeo at CIBC Private Wealth US. “The news on core inflation was better than expected. Retail sales also showed some deceleration from the previously hot consumer sector. Taken together, this supports a Fed rate-cut in the fall.”

Fed Bank of Minneapolis President Neel Kashkari repeated the central bank likely needs to keep rates at the current level for “a while longer,” and questioned how much they’re restraining the US economy.

 

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