Asian shares rose to a one-month high on Wednesday, buoyed by a rally in tech stocks, while the dollar was steady as soft U.S. retail sales data reinforced expectations of the Federal Reserve cutting rates later this year.
MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), is 1% higher and on track for a more than 4% gain in June.
The tech stocks in the region (.MIAPJIT00NUS), opens new tab rose over 2% to a record high as the rally raged on with AI darling Nvidia (NVDA.O), dethroning Microsoft (MSFT.O), to become the world’s most valuable company on Tuesday.
Futures indicated that European bourses were set for a more subdued opening, with Eurostoxx 50 futures little changed and FTSE futures down 0.18%.
Investor focus will be on UK inflation data due later in the day that will set the stage for the Bank of England (BoE) policy decision on Thursday, with the central bank widely expected to stand pat on rates.
The inflation report is expected to show Britain’s inflation rate fell back to the BoE’s 2% target in May, from 2.3% in April, while services CPI is expected to come in at an annual 5.5% in May, from April’s 5.9%.
Kyle Chapman, FX markets analyst at Ballinger Group, said Wednesday’s May inflation report will be the deciding factor and a cut could still be on the table if services inflation gets back on track.
“Unless it collapses, I think we will need a few pieces of evidence to convince the Bank of England that it is sustainably on the way down,” he said.
Sterling, which is down nearly 0.3% so far this month, last fetched $1.2708, while the euro steadied at $1.0736 and is down 1% so far in June.
The single currency has been under pressure in the wake of French President Emmanuel Macron calling for a snap election following a trouncing of his ruling centrist party in the European Parliament elections.
U.S. markets are closed on Wednesday, which will likely result in muted trading throughout the day.
Source: Reuters
Recent Comments