(Bloomberg) — Shares edged higher as traders parsed the latest earnings news and looked forward to a key US inflation print later for clues on the outlook for interest-rate cuts.
Most Read from Bloomberg
Europe’s Stoxx 600 posted modest gains, boosted by a 13% surge in Heineken NV as the brewer reported strong demand for premium brands. An index of Asian shares advanced, while US equity futures contracts were steady.
US inflation likely remained stubborn last month, based on economists’ estimates, backing the Federal Reserve’s patient approach to lowering interest rates. Chair Jerome Powell told Congress Tuesday that the Fed doesn’t need to rush easing, indicating how the economy remained strong.
Treasuries steadied after tumbling across the curve Tuesday as Powell signaled the Fed’s patience on further rate cuts. An index of dollar strength rose.
“The market is taking Powell’s comments in stride,” said Frederic Neumann, chief Asia economist at HSBC Holdings Plc in Hong Kong. “Few believed that Fed was quick to the trigger on further rate cuts, though the door remains open for some easing later in the year.”
American inflation figures due shortly before the second half of Powell’s two-day testimony marathon are forecast to show the consumer price index excluding food and energy rose 0.3% in January for the fifth time in the last six months.
Money markets continued to fully price in just one quarter-point rate cut by the Fed this year, by September. In December, two 2025 cuts were priced in. A strong January jobs report released Friday prompted reassessment of the policy outlook, and today’s data could do the same.
Back in Asia, yields on Japanese 5-year bond climbed to 1% for the first time since 2008, and the yen declined for a third day on concerns over US President Donald Trump’s trade-tariff measures.
The yen is on track for its longest losing streak in more than a month amid heightened concerns Japan may be included in Trump’s tariff plans. The currency was the worst performer among its Group-of-10 peers on Wednesday. The Japanese government asked Trump on Wednesday to exempt the nation’s companies from his fresh tariffs.
“There is a genuine risk that Japan may be hit and this can complicate the near term outlook for yen,” said Christopher Wong, a strategist at Oversea-Chinese Banking Corp. in Singapore.
Source link
