Asian stocks, currencies rise on US rate cut wagers

Reuters

Asian stocks, currencies rise on US rate cut wagers

2024 7월 8 일, 오전 6:10 GMT

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Corrects paragraph 2 to say the U.S. inflation report is due later in the week, not later in the day

Taiwan stocks jump 1.9% to record high

Taiwanese dollar, South Korean won gain 0.2%, each

Malaysia and South Korea policy decisions on Thursday

By Ayushman Ojha

July 8 (Reuters) -Taiwan stocks surged to a record high on Monday leading regional equities broadly higher, while currencies gained on the dollar as investors firmed up expectations the Federal Reserve will cut interest rates in September.

A U.S. inflation report due later in the weekday could bolster easing expectations as headline inflation is forecast to slow.

MSCI's index tracking equities in emerging markets .MSCIEF was up 0.5% hovering at its highest since April 2022. It had jumped 1.7% last week. Trading was thin on Monday as financial markets in Malaysia were closed.

Taiwan shares .TWII rose as much as 1.9% boosted by a global tech rally, with TSMC 2330.TW, the world's largest contract chipmaker and major supplier to Apple AAPL.O hitting an all-time high.

On a macro side, data on Friday showed Taiwan's June inflation came in slightly higher-than-expected.

In the Philippines, shares .PSI were up as much as 0.7%, while Thai stocks .SETI added as much as 0.4%.

Globally, investors await U.S. Federal Reserve Chair Jerome Powell's address before Congress on Tuesday and Wednesday, and the crucial consumer price report on Thursday, to assess the timing of a rate cut.

In Asia, interest rate decisions from South Korea and Malaysia are due on Thursday, where expectations are for a hold for now.

"The market is eyeing a cut (by Bank of Korea) as early as August, but we believe it is still conditional as the forex level remains a concern, and housing prices (have) started to rise again," analysts at Barclays said.

Recent inflation data from countries such as Thailand and the Philippines have shown an easing trend, giving some leeway to the central banks to cut rates.

The Bangko Sentral ng Pilipinas (BSP) has more scope to cut interest rates at its next meeting in August after annual inflation slowed in June, its governor Eli Remolona said.

Elsewhere, South Korean .KS11 shares inched 0.2% higher, while Singapore stocks .STI lost 0.2%.

Regional currencies inched higher as the greenback remained on the back foot following surprisingly soft U.S. payrolls data on Friday, suggesting the Fed could start cutting interest rates as early as September.

Markets are now pricing in 76% odds for a rate cut in September, up from 64% a week ago. FEDWATCH

The Taiwan dollar TWD=TP, the South Korean won KRW=KFTC and the Indonesian rupiah IDR= gained 0.2%, each.

The Thai baht THB=TH inched 0.1% higher, while the Singapore dollar SGD= and the Philippine peso PHP= were largely flat.

Markets are also awaiting China's inflation data on Wednesday and advanced gross domestic product estimates from Malaysia on Friday.

HIGHLIGHTS:

** China's central bank tweaks liquidity operations amid strong bond demand

** Prabowo's free-meal plan stirs investor fears about Indonesia's finances

** Vietnam targeting Q3 GDP growth of 6.5%-7.0%, inflation below 4.5%, PM says

Asia stock indexes and currencies at 0511 GMT
COUNTRY	FX RIC	FX DAILY %	FX YTD %	INDEX	STOCKS DAILY %	STOCKS YTD %
Japan	JPY=	+0.12	-12.12	.N225	0.08	22.36
China	CNY=CFXS	-0.01	-2.36	.SSEC	-0.53	-1.37
India	INR=IN	+0.05	-0.28	.NSEI	-0.08	11.84
Indonesia	IDR=	+0.18	-5.23	.JKSE	-0.06	-0.33
Malaysia	MYR=	-	-2.49	.KLSE	-	10.75
Philippines	PHP=	+0.01	-5.35	.PSI	0.66	1.33
S.Korea	KRW=KFTC	+0.18	-6.59	.KS11	0.07	7.87
Singapore	SGD=	+0.05	-2.12	.STI	-0.22	5.03
Taiwan	TWD=TP	+0.23	-5.14	.TWII	1.67	33.57
Thailand	THB=TH	+0.12	-6.13	.SETI	0.26	-7.09