Asia stocks rally on renewed global rate cut optimism

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Interest Rate,Bank Of England,Global Capital Markets

Asian stocks rose on Friday, on course for a third week of gains, while the dollar was on the back foot as fresh signs of an easing U.S. labour market stoked...

SINGAPORE - Asian stocks rose on Friday, on course for a third week of gains, while the dollar was on the back foot as fresh signs of an easing U.S. labour market stoked optimism around interest rate cuts this year ahead of next week's crucial inflation data.

The figures follow last week's report showing U.S. job growth slowed more than expected in April and the increase in annual wages fell below 4.0% for the first time in nearly three years. Hotter-than-expected inflation reports last month knocked back any lingering expectations of interest rate cuts in the near term, with markets now fully pricing in a 25-basis-point rate cut only in November though there remains a chance of a cut in September.Traders now anticipate 47 bps of cuts this year from the Fed, drastically lower than the 150 bps they priced in at the start of 2024.

Data from Bank of Japan suggests Tokyo spent nearly $60 billion last week in suspected interventions to pull the yen off its 34-year lows of 106.245 per dollar. However, with the yen nudging its way up to the 155 levels, traders are once again on intervention alert.

 

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