SYDNEY, Australia – On Tuesday, Asian shares saw an increase while the dollar continued to weaken for the third consecutive session. This was due to growing expectations of an upcoming rate cut in Europe, sparking more interest in taking risks within the market. Investors, however, remained cautious as they awaited crucial inflation data reports to be released later in the week.
In Europe, markets were preparing for a slightly positive start, with EUROSTOXX 50 futures indicating a 0.2% increase. This followed a boost in gains after several European Central Bank officials suggested the possibility of lowering interest rates as inflation rates decreased. As discussions shifted towards future actions, markets anticipated two rate cuts by October, leading to a rise in Wall Street stock futures ahead of the reopening after a public holiday.
The MSCI’s broadest index of Asia-Pacific shares outside Japan increased by 0.2% after a 0.9% rise the day before. Taiwanese shares reached a record high with a 0.5% climb, while Hong Kong’s Hang Seng index showed a slight increase of 0.1%. On the other hand, Japan’s Nikkei experienced a 0.2% slip, offsetting some of its previous 0.7% advancement.
With the summer season approaching in the northern hemisphere, some analysts predict that markets may enter a period of drift. Analyst Tony Sycamore from IG suggested that the Hang Seng still has room for growth, especially with upcoming data supporting improvements in the Chinese economy. China is scheduled to release manufacturing and services activity surveys for May later in the week.
The upcoming key events to watch for are the U.S. figures on core personal consumption expenditures (PCE) and eurozone inflation data, which are set to influence trading trends. In the foreign exchange markets, the dollar remained weak for the third day in a row, showing a 0.1% decline against major peers.
Amidst these market movements, oil prices continued to rise, with Brent futures up by 0.2% to $83.23 a barrel. U.S. crude futures for July traded at $78.84 a barrel, reflecting a 1.4% increase from Friday’s closing price. Gold prices also saw an increase for the third consecutive day, reaching $2,352.20 per ounce.
Overall, the market remains cautiously optimistic as investors await key data releases and monitor global economic trends for further direction.