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TEHRAN, Jul 4 -Asian stocks advanced on Thursday, tracking solid gains on Wall Street as weak economic data in the United States bolstered the prospect of rate cuts by the Federal Reserve as soon as this month.
TEHRAN, Young Journalists Club (YJC) -MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.4%, while Japan's Nikkei .N225 and Australian benchmark were up 0.3% and 0.6%, respectively, although a U.S. public holiday kept activity somewhat subdued.
European stocks are poised for a marginally higher open, with futures for Britain's FTSE FFIc1 .FTSE adding 0.1% and Germany's DAX FDXc1 .GDAXI up a touch.
On Wall Street, which closed at midday on Wednesday for the eve of Independence Day, all three major stock indexes finished at record closing highs as expectations of Fed policy easing grew. [.N]
A report by a payrolls processor ADP showed U.S. companies added jobs in June, but fewer than what analysts had forecast, raising concerns the labor market is softening even as the current U.S. economic expansion marked a record run last month.
“Stocks and bonds rallied together as the markets were betting on interest rate cuts at the European Central Bank and the U.S. Federal Reserve,” said Noriko Miyoshi, head of fixed income at Simplex Asset Management in Tokyo.
“The pace looks too fast. Investors across the world rushed to take part in the game of yield hunting,” she said.
Global sovereign bonds rallied overnight. The 10-year Treasury note yield plunged to 1.939% US10YT=RR, a level last seen following Donald Trump’s election as president in November 2016.
Most 10-year euro zone bond yields NL10YT=RR, AT10YT=RR, ES10YT=RR, PT10YT=RR slid to record lows on Wednesday as investors bet the ECB’s dovish stance would continue, while the 10-year German Bund yield fell to minus 0.399% DE10YT=RR, flirting with the ECB’s minus 0.40 deposit rate.
European Union leaders’ nomination of Christine Lagarde, the head of the International Monetary Fund, to replace Mario Draghi as president of the ECB reinforced expectations of more monetary policy easing if it’s needed.
Source:reuters
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