Most Asian stocks rose after the S&P 500 index jumped to a record high last Friday, supported by bets that the Federal Reserve will start cutting interest rates this year.
Stocks made gains in Japan and Taiwan, while Hong Kong and China stocks saw mixed performances. US stock futures extended their gains in Asia after seizing a new rise in the group of technology companies that has the most influence on the S&P 500 index, which led the index to achieve a new high level on Friday for the first time in two years.
Japan's Nikkei 225 stock index has risen more than 8% this year, leading to gains in major developed markets. The Bank of Japan is expected to begin its two-day monetary policy meeting on Monday, and most experts largely expect it to remain unchanged on Tuesday when it announces the results of its meeting.
Monetary policy movements
In China, commercial banks kept their key lending rates unchanged on Monday, in line with a similar decision from the People's Bank of China (the country's central bank) amid concerns about pressure on the yuan.
Back in the United States, Mark Chandler, chief market strategist at Bannockburn Global Forex, said: Even though the US S&P 500 and Nasdaq 100 indexes hit new record highs before the weekend, the Japanese stock market is the most exciting this year. . Although the market expects the beginning of a strong monetary easing cycle by several central banks, with the Bank of Japan moving away from negative interest rates, this cycle is expected to begin later in the first half of the current year, and not before that.
In a related context, oil prices fell with Libya (a member of OPEC) resuming production from its largest fields, which overshadowed the impact of concerns about tensions in the Red Sea and the Middle East. The United States continues its attempts to prevent the Iranian-backed Houthi rebels in Yemen from attacking ships crossing the waterway, but this military action may take some time, according to an official in the administration of US President Joe Biden.
Today's performance of currencies and bonds
The price of the US dollar fell against all of its counterparts in the Group of Ten, reducing the gains it achieved this month amid speculation that the Federal Reserve’s policies will lead to a smooth decline in the US economy.
10-year Treasury bonds were little changed after their yields fell on Friday for the first time in a week, after a University of Michigan poll favoring the Federal Reserve showed a combination of high consumer confidence and declining inflation expectations.
The expected big decline in stocks may now be brewing under the surface and may become inconsequential, analyst Ed Yardeni wrote in a note: Unless Fed Chairman Jerome Powell emphasizes monetary policy easing, a speculative bubble may inflate, fueled by the movement of money from instruments that... Offers investors interest in stocks and bonds.
Investors will also be anticipating the first US fourth-quarter GDP estimate data on Thursday, the results of central bank meetings for Canada and Europe, along with South Korea's economic output data and European preliminary readings of purchasing managers' surveys for 2024.
On a political level, Ron DeSantis withdrew from the US presidential race to support Donald Trump (the most likely Republican candidate) before the New Hampshire primary elections on Tuesday.
