Asian Markets Track Wall St Rally On Fed Rate Cut Bets
The gains tracked a rally on Wall Street, where traders rediscovered their mojo following Friday's sell-off that was fuelled by news that fewer-than-expected American jobs were created in July, while the previous two months' figures were revised down sharply.
The reading raised concerns the world's biggest economy was in worse shape than expected, though it also fanned bets the Fed will slash in September, with markets pricing the chance of a 25-basis-point reduction at about 95 percent, according to Bloomberg.
There is also talk that bank officials could go for twice as much as that.
"The narrative flipped fast: soft jobs equals soft Fed, and soft Fed equals risk-on," said Stephen Innes at SPI Asset Management.
But he warned that "if cuts are coming because the labour market is slipping from 'cooling' to 'cracking', then we're skating closer to the edge than we care to admit".
He added: "That dichotomy -- between rate cuts as stimulus and rate cuts as warning flare -- is now front and center.
"If the Fed moves proactively to shield markets from the tariff storm and weak labour, the equity rally has legs. But if policymakers are reacting to a sharper downturn that is in full swing, the runway shortens quickly."
In early trade, Tokyo, Hong Kong, Shanghai, Sydney, Seoul, Singapore, Taipei, Manila and Jakarta were all in the green.
However, while there is a broad expectation that the Fed will cut rates, Lazard chief market strategist Ronald Temple remained sceptical.
"I continue to believe the Fed will not reduce rates at all this year given rising inflation caused by tariffs and a relatively stable unemployment rate," he wrote.
"I would align with the majority of the FOMC members who believe it is more appropriate to hold policy constant until there is greater clarity in terms of the effects of tariffs and stricter immigration enforcement on inflation and employment."
Traders were keeping an eye on trade talks between Washington and dozens of its trade partners after Trump imposed tariffs of between 10 and 41 percent on them.
Among those to strike a deal is India, which Trump on Monday threatened to hit with "substantially" higher rates over its purchases of Russian oil.
Tokyo - Nikkei 225: UP 0.6 percent at 40,544.99 (break)
Hong Kong - Hang Seng Index: UP 0.1 percent at 24,747.97
Shanghai - Composite: UP 0.5 percent at 3,600.02
Dollar/yen: UP at 147.11 yen from 147.08 yen on Monday
Euro/dollar: DOWN at $1.1562 from $1.1573
Pound/dollar: UP at $1.3287 from $1.3285
Euro/pound: DOWN at 87.01 pence from 87.11 pence
West Texas Intermediate: DOWN 0.1 percent at $66.24 per barrel
Brent North Sea Crude: DOWN 0.1 percent at $68.70 per barrel
New York - Dow: UP 1.3 percent at 44,173.64 (close)
London - FTSE 100: UP 0.7 percent at 9,128.30 (close)
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- DW
Trump tariffs: India faces 25% hike as deadline looms – DW – 08/06/2025
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5 hours ago
- DW
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To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video German politicians are debating whether to slash financial assistance for Ukrainian refugees. How does the country stack up against its EU neighbors when it comes to generosity in helping those fleeing war? Read the full story on aid provided for Ukrainian refugees in Germany and across Europe. Russian drones struck a gas pumping station in southern Ukraine, part of an LNG imports scheme from the United States and Azerbaijan, Kyiv's energy ministry said Wednesday. The ministry said the attack on the site near the Ukraine-Romania border was aimed "purely against civilian infrastructure" and targeting relations with Azerbaijan, the US and European partners. There was no immediate comment from Russia. The Kremlin said Russian President Vladimir Putin is hosting US President Donald Trump's special envoy Steve Witkoff for talks. 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In remarks carried by the Russian TASS state news agency, spokesman Dmitry Peskov said: "There is, of course, inertia in this process," referring to the prolonged absence of a meeting between Russian President Vladimir Putin and US President Donald Trump. "It takes time for efforts to bring bilateral relations back onto a normal track." TASS reported that for the first time in modern Russian history more than six months have passed without a summit between the leaders of the two nuclear powers. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video US envoy Steve Witkoff arrived in Moscow on Wednesday, state media reported, where he will meet with Russian officials , with President Donald Trump's deadline to impose fresh sanctions over the war in Ukraine just days away. It is unclear whether Witkoff will meet with Russian President Vladimir Putin. Trump has given the Kremlin until Friday to halt its offensive in Ukraine or face further sanctions. The White House has not been specific regarding potential penalties, but Trump has previously threatened to impose "secondary tariffs" targeting Moscow's remaining trade partners, including China and India. Trump said Tuesday that he would await the outcome of Witkoff's visit before moving forward. "We're going to see what happens," he told reporters. "We'll make that determination at that time." After arriving in the Russian capital, Witkoff was met by presidential special representative Kirill Dmitriev, Russian state news agency TASS said. Volodymyr Zelenskyy said he had had a "productive" conversation with his US counterpart Donald Trump. The Ukrainian president said "the key focus" of their conversation centered around "ending the war." "Many months could have already passed without war, had Russia not been prolonging it," he continued. "Today, we coordinated our positions, Ukraine and the United States. We exchanged assessments of the situation: The Russians have intensified the brutality of their attacks. President Trump is fully informed about Russian strikes on Kyiv and other cities and communities." Zelenskyy said the pair also spoke about sanctions on Russia with Trump's August 8 deadline for Putin to end the war looming large. "Their economy continues to decline, and that's exactly why Moscow is so sensitive to this prospect and President Trump's resolve," Zelenskyy said. Today's spotlight is firmly on Moscow, where US Special Envoy Steve Witkoff is meeting with Russian officials, just days ahead of a deadline set by his boss. President Donald Trump has warned that if Russia fails to agree to a ceasefire in Ukraine by Friday, it will face new sanctions. However, the lack of urgency in Moscow over the past few days suggests Witkoff may leave empty handed. In fact, sources close to the Kremlin say Russian President Vladimir Putin believes he is gaining ground in Ukraine, and that takes precedence over improving relations with the United States. Ukrainian President Volodymyr Zelenskyy has used this moment to press his case for tougher sanctions on Moscow in a call with Trump ahead of Witkoff's visit. We'll be covering all these topics in this blog, with a focus on the ongoing war in Ukraine.
