Asian shares nudged higher on Tuesday while the dollar eased for a third consecutive session, buoyed by expectations of an imminent European rate cut that boosted risk appetite.
Gains were tempered ahead of key inflation data releases later in the week, with Europe expected to open slightly stronger based on futures.
European Central Bank officials signaling room for interest rate cuts as inflation slows have prompted markets to price in two rate cuts by October this year. The positive sentiment spilled over to Wall Street, guiding stock futures higher.
Asian markets mirrored the optimism, with MSCI’s broadest index of Asia-Pacific shares outside Japan gaining 0.2%. Taiwanese shares hit a record high, while Hong Kong’s Hang Seng index rose marginally. In contrast, Japan’s Nikkei slipped slightly.
Analysts see further upside potential for the Hang Seng due to data supporting Chinese economic improvements set to release later this week.
The focus shifts to key economic indicators later in the week, including U.S. core personal consumption expenditures and eurozone inflation data, which will set the tone for trading.
In the foreign exchange market, the dollar weakened against major peers as traders awaited the inflation data release. The Japanese yen steadied against the dollar but weakened against high-yielding currencies like the New Zealand dollar.
Oil prices extended gains, with Brent futures rising to $83.23 a barrel and U.S. crude futures for July at $78.84 a barrel. Gold prices also climbed, reaching $2,352.20 per ounce.
The overall market sentiment remains positive, driven by expectations of monetary policy easing and economic improvements in key regions.
(Reporting by Stella Qiu; Editing by Jacqueline Wong and Edwina Gibbs)
