Asian shares rise, dollar defensive after mild inflation data
Wall Street scaled new heights on Tuesday, driven by increasing certainty the Federal Reserve will cut interest rates next month. Japan's Nikkei broke through the 43,000 level for the first time and cryptocurrency ether rose to an almost four-year high.
The highly-anticipated U.S. inflation readings indicated President Donald Trump's tariff regime had yet to filter down to consumer prices. In Japan, a report showed manufacturers grew more confident about business conditions after a trade agreement with the United States.
"It's clear that almost any good news leads investors to pile money into markets, particularly tech stocks, despite their lofty price tags," Paco Chow, dealing manager at Moomoo Australia and New Zealand, wrote in a note to clients.
"They're riding on 95% odds of a Fed rate cut in five weeks and feeling comfort that inflation is only creeping higher, not running amok," Chow said.
The MSCI All Country World Index of shares climbed for a second day to reach 948.54, a new all-time high. Japan's Nikkei stock index rose 1.4%, also setting a new peak for a second-straight session.
U.S. Labor Department data showed the consumer price index rose 2.7% in the 12 months through July, slightly below the 2.8% rate that economists polled by Reuters had forecast.
A Reuters Tankan poll that tracks the Bank of Japan's quarterly tankan business survey showed Japanese manufacturers' sentiment index improved for a second straight month.
Another report showed Japan's wholesale inflation slowed in July, underscoring the central bank's view that upward price pressure from raw material costs will dissipate. On Wall Street, the benchmark S&P 500 and the Nasdaq hit record highs after President Trump signed an executive order pausing triple-digit levies on Chinese imports for another 90 days.
Traders are pricing in a 94% chance of a Fed cut in September, up from nearly 86% a day ago and about 57% a month earlier, according to the CME FedWatch tool.
Investors had been on tenterhooks about the inflation data because it followed a surprisingly weak jobs report on August 1 and had the potential to stoke concerns about stagflation.
Trump has nominated White House adviser Stephen Miran to temporarily fill a vacant board seat at the U.S. central bank, stirring up speculation about presidential interference in monetary policy.
And the White House said it was "the plan" that the Bureau of Labor Statistics would continue to publish its closely watched monthly employment report after Trump's pick to head the agency E.J. Antoni proposed suspending its release.
Speculation the labour report would be halted has "done the USD no favours and would have only incentivised foreign investors to review their hedging ratios on U.S. investments," Chris Weston, head of research at Pepperstone, said in a note.
The dollar was little changed at 147.84 yen. The euro edged up 0.1% to $1.1684, after a 0.5% jump in the previous session. The dollar index, which tracks the greenback against a basket of major peers, slid for a second day. Ether touched $4,634.70, the highest since December 2021, in early trading before sliding 0.9%.
U.S. crude dipped 0.05% to $63.14 a barrel. Spot gold was little changed at $3,348.1 per ounce. In early trade, pan-region Euro Stoxx 50 futures were up 0.2%, German DAX futures rose 0.3% and FTSE futures climbed 0.1%. U.S. stock futures, the S&P 500 e-minis , were little changed. - Reuters
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New Straits Times
27 minutes ago
- New Straits Times
Malaysian shares trading cheap, may climb further — Analyst
KUALA LUMPUR: Malaysian shares are trading at valuations below their historical average, offering room for gains despite persistent foreign selling and policy uncertainties, said Hong Leong Investment Bank Bhd (HLIB). It said the FTSE Bursa Malaysia KLCI's (FBM KLCI) 2026 valuation is below its five-year mean and along with a firmer ringgit and expectations of a US interest rate cut in September, could support the market in the near term. "The recent reduction in US–Malaysia tariffs to 19 per cent, the rollout of the 13th Malaysia Plan and easing US–China trade tensions, underpinned by a 90-day truce, provide a constructive backdrop for the FBM KLCI," it said in a note today. Yesterday, the FBM KLCI slipped 5.6 points to 1,581.05, snapping a seven-day winning streak totalling 59.6 points, in line with weaker regional sentiment. HLIB said a decisive close above 1,587 points, the May 15 high, would confirm a breakout and pave the way towards the 1,600 to 1,615 resistance zone. "While a brief pullback is possible after the 67.8-point August rally, the near-term bias remains constructive," it added. However, the research house flagged several headwinds, including persistent foreign selling, muted corporate earnings and domestic policy risks. Year-to-date, foreign investors have withdrawn RM14.61 billion from the local bourse, the highest annual outflow since the RM24.6 billion recorded during the 2020 pandemic. In contrast, local institutions have been net buyers of RM12.86 billion, supplemented by RM1.76 billion in retail inflows. HLIB also highlighted a "tariff overhang" as Malaysia awaits clarification from the US on the status of its semiconductor exports following President Donald Trump's proposal for a 100 per cent levy on chips made outside the US. Back home, it said concerns over subsidy rationalisation and a potential expansion of the sales and service tax could weigh on consumer sentiment and cloud earnings visibility.
New Straits Times
an hour ago
- New Straits Times
Wall Street ends flat, but S&P hits another closing high as rate-cut bets waver
NEW YORK: Wall Street's main indexes were mixed on Thursday with S&P 500 edging up to a closing high, while the Dow Jones and Nasdaq were flat, after a hotter-than-expected producer prices report dampened expectations of potential interest-rate cuts. A Labor Department report showed producer prices increased the most in three years in July due to a surge in the costs of goods and services, suggesting a broad pickup in inflation was imminent. Traders trimmed their Fed rate-cut expectations for the rest of the year to about 56.7 basis points, according to data compiled by LSEG, compared with around 63 bps before the report. But they are still fully pricing in a quarter-percentage-point cut in September. "The implication is that the Fed is going to offer a 25-(basis point) cut in September. But it will be a hawkish cut. It's way too early still for the Fed to wish to guide the market towards an extended easing cycle," said Thierry Wizman, global FX and rates strategist at Macquarie Group. "The next important thing will be the Expenditures Price Index later this month. If there are signals that there's inflation broadly in services, the market will take that adversely." A separate report on Thursday showed the number of Americans filing new applications for jobless benefits fell last week. The Dow Jones Industrial Average closed 11.01 points, or 0.02 per cent, down to 44,911.26, the S&P 500 gained 1.96 points, or 0.03 per cent, to 6,468.54 - a new closing high - and the Nasdaq Composite lost 2.47 points, or 0.01 per cent, to 21,710.67. On Thursday, seven of the 11 S&P 500 sectors declined. Recent data reflecting labor market weakness and a moderate rise in consumer prices had strengthened expectations that the central bank will potentially lower interest rates next month. However, Thursday's report fanned concerns that US tariffs on imports could start to impact prices in the coming months and dampen a rally in US stocks that had helped the benchmark S&P 500 and tech-heavy Nasdaq log record highs over the past two sessions. "US stocks are pricy," said Sam Stovall, chief investment strategist CFRA Research. The S&P 500 index is trading at a price-to-earnings ratio of 23 based on forward estimates, or a near-40 per cent premium to its 20-year average, he said. The hotter-than-expected PPI report now has investors pulling petals from a daisy saying "They (the Fed) will cut rates, they won't cut rates," he added. St. Louis Fed President Alberto Musalem, a voting member on the Federal Open Market Committee this year, said a half-point rate cut at the Fed's September meeting is not warranted, a day after Treasury Secretary Scott Bessent said it was possible. Intel Corp rose 7.4 per cent as Bloomberg News reported the Trump administration is in talks with Intel to have the US government potentially take a stake in the chipmaker, the news organization reported on Thursday, citing people familiar with the plan. Cisco Systems declined 1.6 per cent after the network equipment manufacturer's broadly in-line forecast did little to encourage investors. Deere & Co fell 6.8 per cent after the farm-equipment maker reported a lower quarterly profit and tightened its annual profit forecast, while Tapestry plunged 15.7 per cent after the Coach handbag maker forecast annual profit below estimates. Both companies warned of tariffs impacting their businesses. In geopolitics, focus will be on President Donald Trump's upcoming meeting with Russia's President Vladimir Putin as he seeks to achieve a halt to the Ukraine conflict. Declining issues outnumbered advancers by a 2.29-to-1 ratio on the NYSE. On the Nasdaq, declining issues outnumbered advancers by a 2.14-to-1 ratio. The S&P 500 posted 15 new 52-week highs and one new low while the Nasdaq Composite recorded 78 new highs and 78 new lows. Volume on US exchanges was relatively light, with 16.3 billion shares traded, compared to an average of 18.3 billion shares over the previous 20 sessions.
The Sun
an hour ago
- The Sun
Trump told Norwegian minister he wants Nobel Prize, newspaper reports
OSLO: When U.S. President Donald Trump called Norway's finance minister last month to discuss tariffs, he also told him he wanted the Nobel Peace Prize, Norwegian business daily Dagens Naeringsliv reported on Thursday. Several countries including Israel, Pakistan and Cambodia have nominated Trump for brokering peace agreements or ceasefires, and he has said he deserves the Norwegian-bestowed accolade that four White House predecessors received. 'Out of the blue, while Finance Minister Jens Stoltenberg was walking down the street in Oslo, Donald Trump called,' Dagens Naeringsliv reported, citing unnamed sources. 'He wanted the Nobel Prize - and to discuss tariffs.' In a comment to Reuters, Stoltenberg said the call was to discuss tariffs and economic cooperation ahead of Trump's call with Norwegian Prime Minister Jonas Stoere. 'I will not go into further detail about the content of the conversation,' he added. Several White House officials, including U.S. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer were on the call, Stoltenberg added. The White House and the Norwegian Nobel Committee did not reply to requests for comment. With hundreds of candidates nominated each year, laureates are chosen by the Norwegian Nobel Committee, whose five members are appointed by Norway's parliament according to the will of Swedish 19th-century industrialist Alfred Nobel. The announcement comes in October in Oslo. The Norwegian newspaper said it was not the first time Trump had brought up the prize in conversation with Stoltenberg, a former secretary general of the NATO military alliance. The White House on July 31 announced a 15% tariff on imports from Norway, the same as the European Union. Stoltenberg said on Wednesday that Norway and the United States were still in talks regarding the tariffs. - Reuters
