The Asian stocks were firm on Thursday, taking their lead from gains on Wall Street. Japan’s Nikkei rose 0.5%, while Australia’s stock benchmark was up 0.1%. Mainland Chinese blue chips also added 0.4%, however, Hong Kong’s Hang Seng slipped 0.3%. U.S. S&P 500 futures indicated a 0.1% increase after the cash index advanced 0.4% on Wednesday.
The dollar remained weak after slumping overnight to its lowest level against the euro since the end of last year. The single currency traded flat at $1.1009 after reaching $1.10475 in the previous session. The 10-year Treasury yield ticked up slightly to 3.84% in Asian hours, rebounding from a low of 3.811% on Wednesday.
Traders are convinced that the Federal Reserve will reduce rates on Sept. 18 for the first time in 4-1/2 years. However, there is debate on whether policymakers will opt for a super-sized 50 basis-point reduction. While inflation is slowing, signs it may remain sticky have caused a reduction in bets on a larger cut to 37.5% from about 50% a day earlier.
A major macroeconomic test is set for later on Thursday with the release of U.S. retail sales figures. The market is on edge as concerns about a recession in the U.S. loom. The outcome of these figures could either soothe or exacerbate these concerns.
“If we were to see a negative retail control sales number, it would likely set alarm bells ringing, given the market’s recent concerns about a recession in the U.S.,” said Tony Sycamore, a market analyst at IG. The dollar was stable at 147.35 yen as the pair continued its week-long consolidation around the 147 mark.
Gold edged up 0.1% to $2,449.60 per ounce after Wednesday’s 0.7% dive. Oil prices rose on Thursday, recovering some of the previous day’s loss, on hopes that potential Fed rate cuts would boost demand. Brent crude futures added 0.2% to $79.93 a barrel, and U.S. West Texas Intermediate crude increased 0.3% to $77.21. Both benchmarks fell more than 1% on Wednesday after an unexpected rise in U.S. crude inventories.
The Asian stocks remained firm while the dollar weakened due to lower U.S. Treasury yields. Uncertainty and speculation surround the Federal Reserve’s potential interest rate cuts, with all eyes on the upcoming U.S. retail sales figures. The commodity market also saw fluctuations, with gold and oil prices responding to market sentiment. The global economic landscape remains volatile, and investors are closely monitoring all developments for cues on the future direction of financial markets.