By Wayne Cole<\/p>\n
SYDNEY (Reuters) -Asian share markets followed Wall Street higher on Friday as the growing prospect of several more U.S. rate cuts promised to lower borrowing costs globally, a relief to stressed bond markets and a drag on the dollar.<\/p>\n
Indexes in Japan, South Korea and Taiwan all scaled record peaks, urged on by extravagant expectations for AI-related earnings growth.<\/p>\n
The U.S. consumer price report had been the last major hurdle to the Federal Reserve cutting interest rates next week, and it proved unthreatening, if a little firm.<\/p>\n
Indeed, costs in the CPI that feed into the Fed’s preferred measure of core personal consumption expenditures (PCE) were on the soft side, leading analysts at Citi to predict a steady reading of 2.9% for August.<\/p>\n
“It’s an encouraging reading for Fed officials preparing to engage in a series of rate cuts,” said Veronica Clark, an economist at Citi.<\/p>\n
“We continue to expect 125bp of rate cuts over the next five FOMC meetings, with growing risk that the Fed will continue cutting rates below 3%.”<\/p>\n
Markets continue to imply a 100% chance of a quarter-point cut to 4.00%-4.25% next week, and ramped up the probability of two further easings this year to around 90%.<\/p>\n
The Treasury market has already eased in anticipating with 10-year yields down 20 basis points in the past two weeks, effectively a rate cut given mortgage rates are tied to yields in the United States.<\/p>\n
That drop helped soothe concerns in some other major bond markets, particularly in Europe, pressured by political uncertainty and expanding fiscal burdens.<\/p>\n
In Asia, Japan’s Nikkei climbed 0.6% to another all-time high, bringing gains this week to 3.7%. South Korea added 1.1%, taking its weekly rise to more than 5%.<\/p>\n
Chinese blue chips edged up 0.2% to the highest since early 2022. MSCI’s broadest index of Asia-Pacific shares outside Japan jumped 1.2%.<\/p>\n
ECB IN A GOOD PLACE<\/p>\n
The joy spread to European shares with the EUROSTOXX 50 futures, FTSE futures and DAX futures all up 0.3%. S&P 500 futures and Nasdaq futures were flat having hit new peaks overnight.<\/p>\n
In currency markets, the dollar was back at 147.23 yen, having briefly been as high as 148.20 the previous session. Japanese and U.S. finance ministers on Friday released a statement reaffirming that neither country would target currency levels in their policies.<\/p>\n
The euro held at $1.1730, having got a modest fillip on Thursday when the European Central Bank kept rates unchanged and signalled it was in a “good place” on policy.<\/p>\n
“This suggests the Governing Council is not inclined to ease in the absence of a large growth shock,” said Greg Fuzesi, an economist at JPMorgan. “We have thus moved back our call for a final rate cut from October to December.”<\/p>\n
Story Continues <\/p>\n
“We recognise the ECB might be done with cuts, but still think downside growth risks and the inflation outlook justify an easing bias.”<\/p>\n
After the meeting, ECB sources told Reuters the December meeting would be the most realistic time frame to debate whether another cut was needed to buffer the economy.<\/p>\n
Markets imply only a one-in-five chance of a December easing, and around a 60% probability the ECB is done for this cycle.<\/p>\n
In commodity markets, gold was flat at $3,633 an ounce, just off the record top of 3,673.95 hit early in the week. [GOL\/]<\/p>\n
Oil prices were under pressure after the International Energy Agency predicted an even larger record oil surplus next year as OPEC continues to pump more product. [O\/R]<\/p>\n
Brent dropped 0.4% to $66.09 a barrel, while U.S. crude eased 0.5% to $62.07 per barrel.<\/p>\n
(Reporting by Wayne ColeEditing by Shri Navaratnam)<\/p>\n","protected":false},"excerpt":{"rendered":"By Wayne Cole SYDNEY (Reuters) -Asian share markets followed Wall Street higher on Friday as the growing prospect…\n","protected":false},"author":2,"featured_media":137567,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[74506,45,49,48,13622,6307,50130,2071,2454,100,19301,74507,18262],"class_list":["post-137566","post","type-post","status-publish","format-standard","has-post-thumbnail","category-markets","tag-bond-markets","tag-business","tag-ca","tag-canada","tag-currency-markets","tag-earnings-growth","tag-ecb","tag-federal-reserve","tag-japan","tag-markets","tag-rate-cuts","tag-share-markets","tag-south-korea"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/137566","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=137566"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/137566\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/137567"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=137566"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=137566"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=137566"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}