- Most Asian stocks rose on Monday, buoyed by persistent optimism over lower interest rates following the Federal Reserve's 50 basis point cut last week. However, gains were limited due to a weak Friday close on Wall Street and a market holiday in Japan.
- Chinese markets advanced after the People's Bank of China cut its 14-day reverse repo rate to 1.85% from 1.95%. The Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose 0.5% and 0.4% respectively, while Hong Kong's Hang Seng index added 0.7%.
- Australia's ASX 200 was the worst performer in Asia, losing 0.6% as it retreated from record highs. Supermarket giants Woolworths and Coles Group fell 3-4% after being sued by Australia's competition regulator for allegedly misleading customers over discounts.
- Australian economic data showed weakness:
- Services PMI Flash came in at 50.6 (Previous 52.5)
- Manufacturing PMI Flash fell to 46.7 (Previous 48.5)
- Composite PMI Flash dropped to 49.8 (Previous 51.7)
- The Reserve Bank of Australia is expected to keep interest rates unchanged at 4.35% in its upcoming meeting on Tuesday, but is likely to maintain a hawkish stance due to sticky inflation and a strong labor market.
- New Zealand's trade deficit widened:
- Exports fell to 4.97B (Previous 6.09B)
- Imports increased to 7.17B (Previous 7.11B)
- Monthly Trade Balance worsened to -2203M (Previous -963.0M)
- Oil prices rose, with Brent crude futures up 0.5% at $74.29 a barrel and U.S. crude futures up 0.9% at $71.64. Heightened conflict in the Middle East and expectations of increased demand following the U.S. rate cut supported prices.
- Gold prices hit a record high in Asian trade, with spot gold rising 0.3% to $2,631.19 an ounce. The yellow metal benefited from lower U.S. interest rates and a softer dollar.
- The dollar index and dollar index futures rose slightly in Asian trade, steadying after last week's losses. The Australian dollar gained 0.3% ahead of the RBA meeting, while the Japanese yen weakened 0.3% against the dollar.
- Investors await a series of Fed speeches this week, including remarks from Chair Jerome Powell, as well as key U.S. data due on Friday.
- European and U.S. stock futures pointed to a positive open, with gains between 0.2% and 0.6%.
- Japanese Foreign Minister Yoko Kamikawa is set to meet her Chinese counterpart, Wang Yi, in New York on Monday, amid tensions following recent attacks on Japanese nationals in China.
- EURUSD is flat, silver is down 0.4% and gold is up only 0.3%. Cryptocurrency market is higher after calm weekend; currently Bitcoin is up 1.5% today and Ethereum is trading almost 4% higher.
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