A regional equities barometer is on track to reach its best closing since September as it continued to rise for a fourth day. Following the announcement on Sunday that short selling will be prohibited in South Korea until the end of June, the country’s stocks led the rise, with the Kospi rising as much as 4.4%.
Prior to a scheduled meeting with a regulator, dollar bonds and China Vanke Co. shares gained strength, while Chinese technology and real estate developers also saw gains.
As the Asian currencies caught up with the US dollar’s slide on Friday, most of them gained ground against it. Rates on Treasury 10-year notes increased little following a nine basis point decline in the prior session. As an indication of changing rate expectations, the policy-sensitive two-year fell 15 basis points at the end of last week. In Asia, US equities futures saw minimal movement.
Reductions by June have already been completely priced in by investors, who advanced their estimates of Federal Reserve rate cuts for next year, according to swaps pricing. A little uptick in unemployment and a lower-than-expected US payrolls data contributed to the surge in dovish bets.
Investors have a little more reason to believe that the Fed is likely done raising rates, but they still need to be cautious, according to Vasu Menon, managing director of investment strategy at OCBC Bank Singapore, who made this statement on Bloomberg Television. “Bond yields could rise again if the economy shows to be more resilient and if inflation proves to be more stubborn.”
The market and Fed officials are headed for a clash because forecasts for Fed easing next year do not align with the so-called higher-for-longer narrative that policymakers have established in recent months.
In a letter, Yardeni Research Inc. founder Ed Yardeni stated, “We think the stock market’s correction is over and that the S&P 500 is back on track to end the year at 4,600.” According to him, achieving this level would mean a 5.5% gain by the end of 2023.
Following the bank’s announcement of a share repurchase programme and dividend increase, Westpac’s stock price increased. When DBS Group Holdings Ltd. reported its third-quarter earnings on Monday, it surpassed analyst profit projections.
In a mainly dovish policy statement on Monday, Bank of Japan Governor Kazuo Ueda stated that the central bank is gradually moving closer to its inflation objective. The third quarter saw less growth in Indonesia’s economy than economists had predicted.
Following a four-meeting hiatus, investors will be watching for a possible rate rise from the Reserve Bank of Australia on Tuesday. China will make trade statistics public in response to remarks made on Sunday by Premier Li Qiang, who promised to increase imports.
In terms of commodities, oil rose in Asia on the reaffirmation by Saudi Arabia and Russia that they will maintain daily supply caps above one million barrels until the end of the year. After rising on Friday on hopes that the Fed won’t proceed with more monetary tightening, gold began to decline.