News
Stocks fall slowly, dollar remains firm as Fed focus intensifies; cryptocurrency flies
By Kevin Buckland
TOKYO (Reuters) – Asian stocks slipped lower while the dollar held steady on Tuesday as investors awaited the minutes of the Federal Reserve’s latest policy meeting to gauge the timing and extent of possible interest rate cuts this week. ‘year.
Japan’s tech-heavy Nikkei rose, however, led by chip stocks after the Nasdaq hit a record high overnight ahead of Nvidia’s earnings expected on Wednesday.
Gold inched back towards an all-time high on Monday as crude oil prices fell on fears that US interest rates will remain higher for longer as Fed officials maintained a cautious view on recent easing of inflation.
Cryptocurrencies Ether and Bitcoin have risen to new six-week highs amid speculation that the US Securities and Exchange Commission (SEC) may approve a spot ether exchange-traded fund (ETF).
Markets are currently factoring in about 41 basis points of rate cuts from the Fed this year, with a quarter-point cut fully priced in for November.
Traders rushed to rebuild bets on easing after data earlier this month showed consumer price pressures eased in April, following a three-month run of upside surprises at the start of the year .
Even so, Fed officials are reluctant to declare that inflation is coming back under control, with Vice President Philip Jefferson saying Monday that it was too early to say whether the slowdown is “long-lasting,” and Vice President Michael Barr who said that the restrictive policy needs more time. .
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.6%, weighed down by a more than 1% decline in the Hang Seng from Monday’s multi-month peak.
Japan’s Nikkei was a rare bright spot, rising 0.2%, adding to the previous day’s 0.73% rally.
Nasdaq futures fell 0.1% after the cash index rose 0.65% overnight to close at record highs. S&P 500 futures held steady after Monday’s 0.1% gain.
“Market sentiment remains relatively robust, with low implied volatility, supported by greater confidence in U.S. rate cuts this year,” Kyle Rodda, senior market analyst at Capital.com, wrote in a note.
At the same time, all-time highs for metals such as gold and copper “are being held up as a sign that economic activity is improving globally, and this could be a factor keeping inflation sticky,” Rodda said.
Gold fell 0.2% to around $2,420 an ounce, after pushing to the cusp of $2,450 for the first time overnight.
The dollar strengthened slightly against major currencies on Tuesday, with the dollar index rising 0.1% to 104.69 after a similar rise on Monday.
The yield on the 10-year Treasury note was little changed at 4.4453%, after rising 1.7 basis points on Monday.
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Brent crude futures fell 12 cents, or 0.1%, to $83.34 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 8 cents, or 0.1%, to 79.72 dollars a barrel.
Meanwhile, Monday’s strong results continued their ascent as traders bought cryptocurrencies following a report that the SEC had suddenly asked exchanges that want to trade ether ETFs to update regulatory filings, boosting bets that approval could come this week.
Bitcoin rose to $71,957 and ether jumped to $3,720.80, both reaching levels not seen since April 9.
“Ether ETF speculation certainly played its part in the move, adding fuel to the crypto bull market bonfire that had reignited following last week’s colder US CPI data,” the analyst said by IG Tony Sycamore.
Sycamore expects Bitcoin to retest the all-time high of $73,803.25 in the coming days before pushing towards $80,000.
(Reporting by Kevin Buckland; Editing by Subhranshu Sahu)