Why are Asian stocks poised to reach a new record high?

Asian stocks are poised for a new record high due to weak US retail sales figures, which have increased expectations that the Federal Reserve will lower interest rates this year.

What impact did the US retail sales report have on Treasuries?

The unexpected stall in US retail sales in December led to a drop in Treasury yields, as markets increased their bets on the Federal Reserve implementing interest rate cuts.

What is the significance of the upcoming US jobs report?

The upcoming US jobs report is crucial as it will provide further insights into the economy's momentum, influencing market sentiment regarding potential economic growth and Federal Reserve policy.

Home / Business and Economy / Asia Stocks Eye Record High on Fed Rate Cut Hopes

Asia Stocks Eye Record High on Fed Rate Cut Hopes

11 Feb

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Summary

Asian stocks poised for a fresh record, boosted by weak US retail sales.
Treasury yields dropped, increasing the likelihood of Fed rate cuts.
US jobs report awaited for further clues on economic momentum.

Asia Stocks Eye Record High on Fed Rate Cut Hopes

Equity futures indicate a positive opening for Asian markets, with a gauge of regional stocks already hitting a new high on Tuesday. This advance is supported by weak US retail sales figures for December, which have bolstered the case for the Federal Reserve to implement interest rate cuts this year. Consequently, Treasury yields have declined, and money markets are now anticipating a greater number of rate reductions.

The US economy showed signs of slowing as retail sales unexpectedly stalled in December, suggesting reduced consumer spending. This economic backdrop has led to predictions of potential rate cuts from the Federal Reserve, though some analysts caution against interpreting the data as a disaster. All eyes are now on the upcoming US jobs report, which is expected to provide a clearer picture of economic momentum.

Market participants are anticipating a rise in January payrolls, which would be the strongest in four months, with the unemployment rate expected to remain stable. In other market movements, Bitcoin saw a dip below $70,000. Federal Reserve officials have indicated that interest rates may remain on hold as they assess economic data, with some suggesting that significant labor market weakness would be necessary to support further rate cuts.