SYDNEY : Asian stocks were steady on Monday ahead of central bank meetings that are widely expected to deliver two more rate cuts and key U.S. inflation figures that should flash a green light for more easing there.
A holiday in Japan made for thin trading and MSCI’s broadest index of Asia-Pacific shares outside Japan was little changed, after bouncing 2.7 per cent last week.
Japan’s Nikkei was shut but futures were trading at 38,300 compared to a cash close of 37,723. The index rallied 3.1 per cent last week as the yen eased from its highs and the Bank of Japan (BOJ) signalled it was in no rush to tighten policy further.
S&P 500 futures and Nasdaq futures were both up 0.1 per cent. The S&P is up 0.8 per cent so far in September, historically the weakest month for stocks, and has gained 19 per cent year-to-date to reach all-time highs.
More than 20 billion shares changed hands on U.S. exchanges on Friday, the busiest session since January 2021. Analysts at BofA noted the S&P rises an average of 21 per cent when there is no recession in the 12-months after the start of Fed cuts.
Markets were still basking in the afterglow of the Federal Reserve’s half-point rate cut, with futures implying a 51 per cent probability it will deliver another outsized move in November.
“While the move was well flagged, its importance is hard to overstate, given the Fed’s role in USD liquidity conditions worldwide,” said Barclays economist Christian Keller.
“We note that initiating a cycle with a 50bp move without an imminent financial crisis or jobs actually being lost is quite unusual for the Fed,” he added. “We thus think the step reveals the Fed’s determination to avoid a deterioration in labour market conditions, or, in market jargon: to achieve a soft