Asian stocks edge higher as investors eye Fed hike, China stimulus

HONG KONG, July 11 (Reuters) – Asian shares rose and the safe-haven dollar fell on Tuesday as investors hoped this week’s U.S. inflation data would signal an immediate end to rate hikes. development.

Markets await Wednesday’s U.S. inflation data to see if price pressures continue to moderate, which could provide clues on the interest rate outlook.

European markets were set for a higher open, with pan-region Euro Stoxx 50 futures down 0.26%, German DAX futures down 0.37% and FTSE futures down 0.02%.

In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 1.6% while U.S. stock futures, the S&P 500 e-minis, rose 0.07%.

Investors digested comments from several Federal Reserve officials on Monday, who said that while additional rate hikes are needed to curb inflation, the end of the central bank’s current cycle of monetary policy tightening is nearing.

“US CPI will remain in focus, adding to the associated event risk shock,” ANZ analysts said in a note.

Australian shares (.AXJO) rose 1.23%, while Japan’s Nikkei share index (.N225) rose 0.14%.

China’s blue-chip CSI300 index (.CSI300) was up 0.63% in afternoon trade. Hong Kong’s Hang Seng Index (.HSI) advanced 1.75%.

Data showing Chinese producer prices fell more than expected on Monday suggested the country’s “post-Covid recovery is running out of steam”, but ANZ said “policymakers may need to do more to boost demand”. researchers.

Chinese regulators on Monday extended some policies in a rescue package introduced in November to boost liquidity in the troubled real estate sector.

Analysts said that while the extended policy would ease short-term financial pressure on property developers and ensure their housing project completions, new measures would be needed to deal with the cash crunch in the sector.

Current measures are “unlikely to sufficiently stimulate home purchases and revive the property sector,” wrote Ding Lu, Nomura’s chief China economist. “Beijing may need to take additional steps to arrest the downward spiral.”

On Monday, U.S. stocks rose after last week’s losses, while comments from Fed officials reinforced the view that the U.S. central bank may be at the end of its tightening cycle.

On Wall Street, the Dow Jones Industrial Average (.DJI) was up 0.62%, the S&P 500 (.SPX) was up 0.24% and the Nasdaq Composite (.IXIC) was up 0.18%.

S&P 500 earnings start this week with reports from some of the biggest US banks. Analysts had expected revenue to fall 6.4% in the second quarter year-on-year, Refinitiv’s IBES data showed.

Among U.S. Treasuries, the yield on the benchmark 10-year Treasury note hit 3.9879%, compared with 4.006% on Monday. Two-year yields rose on traders’ expectations that the Fed funds rates will be higher, touching 4.8515% compared to the US close of 4.862%.

The central bank’s comments pushed the greenback to a two-month low of 101.75 against a basket of currencies in early Asian trade as investors raised expectations of how much more U.S. interest rates should rise.

The Japanese yen rose to a one-month high of 141.15 per dollar on Tuesday and last traded at 140.735 per dollar, supported by a decline in US Treasury yields.

US crude oil rose 0.66 percent to $73.47 a barrel. Brent crude was up 0.58% at $78.14 a barrel.

Gold was slightly higher. Spot gold traded at $1929.59 an ounce.

Editing by Sam Holmes and Jamie Freed

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