Asia-Pacific markets were set to kick-start the week higher on Monday with Nikkei 225 Chicago futures pointing to a 2% jump from the index’s last close, after a key U.S. inflation report late last Friday raised hopes for an interest rate cut.
The U.S. June personal consumption expenditures price index, rose 0.1% month on month, and 2.5% compared to the same period a year ago, in line with estimates from economists polled by Dow Jones.
In Asia, the highlight for this week will be the Bank of Japan’s monetary policy meeting. A Reuters poll of economists expects the central bank to raise rates by 10 basis points to 0.1%.
A note from ING has said that the bank will lift rates by 15 basis points and reduce its bond-buying program simultaneously.
“We believe that the economy is back on a recovery track after an unexpected contraction in the first quarter of 2024, and solid wage growth for May should the central bank give more confidence,” the analysts wrote.
Other key inflation data from the region include China’s July PMI data, while Australia will release its latest set of inflation data before the central bank’s Aug. 6 monetary policy meeting.
Futures for Australia’s S&P/ASX 200 stood at 7,938, slightly higher than its last close of 7,921.3.
Japan’s Nikkei 225 futures pointed to a sharply higher open for the market, with the futures contract in Chicago at 38,495 and its counterpart in Osaka at 38,200 compared to the previous close of 37,667.41. Should the market track the futures data, this would snap the Nikkei’s eight day losing streak.
Hong Kong Hang Seng index futures were at 17,126, lower than the HSI’s last close of 17,021.31.
On Friday in the U.S., the Dow Jones Industrial Average rallied 1.64%,, while the S&P 500 climbed 1.11% and the Nasdaq Composite gained 1.03%.
Friday’s moves stem from a combination of oversold sentiment, a stronger-than-expected GDP report Thursday and the view that the Federal Reserve will begin cutting rates, said CFRA Research’s Sam Stovall.
—CNBC’s Samantha Subin and Pia Singh contributed to this report.
Source: CNBC