Financial markets in Asia mostly strengthened on Tuesday (23/4). This was triggered by expectations of earnings this week from a number of technology giant companies, helping to offset concerns regarding the interest rate plans that will be announced by the Federal Reserve (central bank), related to US growth and inflation.
Easing Iran-Israel tensions following the two countries traded missile attacks continued to weigh on oil prices, while the yen edged higher as Japan once more warned authorities it had room to intervene to support the currency.
Investors were slightly more optimistic this week following last week’s upheaval sparked by fading hopes for a US interest rate cut and concerns that the Middle East crisis might escalate into a regional war.
The focus is currently on reports from Wall Street giants including Amazon, Apple, Netflix and General Motors. Observers say that traders want to see strong earnings as well as a positive outlook.
However, there are concerns that equities will take a hit if the results disappoint. The market’s surge in recent months was helped in part by speculation that companies would deliver strong returns, even as hopes of a Fed rate cut faded.
However, all three main indexes in New York posted much-needed gains, while London’s index ended at a record high as the Bank of England is expected to cut interest rates soon thanks to cooling inflation.
Also read: US Stocks Hit by Latest Inflation Data, Gold Prices Soar
And most Asian countries are also following the same steps. Shares in Hong Kong rallied more than one percent, while Tokyo, Sydney, Seoul, Singapore, Taipei, Manila and Jakarta also enjoyed buying.
Important data from Washington this week will provide insight into the central bank’s policy plans, regarding US GDP growth and inflation rates. This will be a key consideration for monetary policy makers.
“The debate surrounding the Federal Reserve’s stance on interest rate cuts remains, especially following Chair Jerome Powell and other policymakers adopted a more aggressive tone. hawkish last week in response to persistent inflationary pressures,” said Stephen Innes of SPI Asset Management.
Also read: Inflation Slows in France, Increases in Italy
Hawskish is monetary policy that tends to be contractionary, such as increasing interest rates or reducing the central bank’s balance sheet.
“This data release will be critical in determining whether the Fed maintains its current policy stance, keeping interest rates higher for a longer period of time.”(AFP/M-3)
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