In the Asian markets, the focus is on the upcoming monetary policy decisions from New Zealand and Indonesia. This comes as debate over the first US rate cut continues and stock markets consider their next moves. While Asian stocks retreated on Tuesday after a seven-day winning streak, Wall Street saw gains with the Nasdaq hitting a new high ahead of Nvidia’s first-quarter earnings report.
Federal Reserve officials emphasized patience regarding interest rates, indicating that it may take several months before they are confident in the return of inflation, which would then allow them to consider cutting rates. With many global stock markets reaching all-time or multi-year highs, a cooling off period may be on the horizon. The MSCI Asia ex-Japan index fell 0.9% on Tuesday, Japan’s Nikkei lost 0.3%, and Hong Kong’s Hang Seng dropped over 2%.
After reevaluating his bearish outlook on Wall Street, Morgan Stanley’s Mike Wilson, JP Morgan’s Marko Kolanovic, remains bearish on US stocks, citing high valuations. Kolanovic, however, is more bullish on Asian markets, particularly Japanese and Chinese stocks, due to factors such as inflation, monetary policy normalization, property market support measures, investor positioning, and valuations.
Investors in Asia are awaiting the results from Nvidia, along with two monetary policy decisions and economic data that could impact exchange rates. The Reserve Bank of New Zealand and Bank Indonesia are expected to keep their key interest rates unchanged, with the RBNZ likely to cut rates once this year and BI expected to maintain its rate until the Federal Reserve makes a move.
BI Governor Perry Warjiyo has indicated that there is no immediate need to raise rates further and is focused on strengthening the rupee. The rupee closed at 15,990 per dollar on Tuesday, and key developments, such as the New Zealand and Indonesia monetary policy decisions, Japanese trade data, and US inflation figures, could provide further direction to the markets on Wednesday.
In conclusion, Asian markets are closely watching monetary policy decisions, economic data, and market trends as they navigate through uncertainty surrounding interest rates and stock valuations. The focus on Asia’s potential and the impact of global economic factors highlight the continuing importance of monitoring developments in these markets.
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https://finance.yahoo.com/news/morning-bid-zealand-indonesia-set-214711325.html
