Asian stock rise on the rate increase end cycle. On Friday, the majority of Asian stock markets increased as decreasing inflation eyed
Asian stocks rose in that rate hikes are stopped
On Friday, gains were restrained due to concerns over slowing economic growth. And rising estimates that the world’s central banks may delay further tightening of monetary policy due to falling inflation.
The Monetary Authority of Singapore is the most recent of a rising number of central banks to halt further interest rate increases. The decision was made in light of statistics indicating that Singapore’s economy cooled down more than anticipated. During the initial quarter of 2023.
Inflation in the producer price index decreased even further in March. According to overnight U.S. statistics. The information raised expectations that the Fed would soon stop raising interest rates. Particularly as it came a day after the consumer price index fell. The Fed will raise rates one more time in May, prior to a pause in June, according to Fed Fund futures pricing.
The prospects of the end of the rate rise cycle helped broader Asian stock markets
Asian markets were helped by the potential for a break in rate rises, with China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indices rising 0.3% and 0.2%, respectively. The two factors were further aided by a sudden uptick in exports. Which may portend a more significant economic revival for the nation.
Although local IT giants suffered significant losses this week, Hong Kong’s Hang Seng index remained unchanged. Given that the BoJ attitude is far more dovish than that of most other central banks, Japan’s Nikkei 225 index increased by 1%.
The Straits Times Index in Singapore increased by 0.3%, and the KOSPI in South Korea by 0.5%. And the ASX 200 in Australia by 0.5%.
The monetary regulator of Singapore’s decision to forego further rate increases follows swiftly on the heels of similar decisions by numerous regional rivals. Including Australia, South Korea, India, and the Philippines. The pattern coincides with a slowdown in economic growth and a decline in inflation from 2022 high levels. Through 2022, the majority of regional central banks have drastically increased interest rates to combat rising inflation.
Asian Fx Markets
Due to sluggish U.S. inflation, the dollar drops to a one-year low.
Early on Friday in European trading, the U.S. dollar plunged to a one-year low on growing fears that the Fed cycle of rate increases will stop. Due to cooler-than-expected inflation statistics.
The Dollar Index, was down 0.2% at 100.515 at 02:00 ET (06:00 GMT), reaching marks that were last observed in April of the previous year. The index is expected to have its worst weekly fall since January of this year one of more than 1%. Following the release of the March U.S. producer prices index, which showed a 0.5% decrease from the previous month. The largest decrease since the epidemic began—the greenback experienced losses.
US PPI
| Release Date | Time | Actual | Forecast | Previous | |
| Apr 13, 2023 (Mar) | 08:30 | -0.5% | 0.1% | 0.0% | |
| Mar 15, 2023 (Feb) | 08:30 | -0.1% | 0.3% | 0.3% | |
| Feb 16, 2023 (Jan) | 09:30 | 0.7% | 0.4% | -0.2% | |
| Jan 18, 2023 (Dec) | 09:30 | -0.5% | -0.1% | 0.2% | |
| Dec 09, 2022 (Nov) | 09:30 | 0.3% | 0.2% | 0.3% | |
| Nov 15, 2022 (Oct) | 09:30 |
Major Currencies rise against USD in the Asian session
After statistics released on Thursday revealed that German consumer prices remained high. The EURUSD increased 0.2% to 1.1069, reaching a new one-year top. This suggests that the ECB is going to keep raising interest rates for an extended amount of time than the US Federal Reserve.
The BoE is seen to raise rates again in May, with U.K. inflation ongoing in double digits, after unexpectedly surging to 10.4% in Feb. The GBPUSD exchange rate soars by 0.1% to 1.2535, reaching a 10-month peak.
USDCNY dropped 0.5% to 6.8382, with the yuan. Benefiting from PBOC Governor Yi Gang’s repetition of the government’s 5% GDP objective for 2023. USDJPY dipped 0.1% to 132.50.
After US PPI put markets into a tumble and the US Dollar came under more downward pressure The AUD surged higher overnight.
Summary of Asia Pacific Session
The likelihood of a significant economic event is low for Friday’s Asia-Pacific trade day. For investors, this can make emotion more important. As a result, regional indexes maintain the upward trend seen on Wall Street (in which the S&P 500, Nasdaq 100, and Dow Jones surged). Demand for the US Dollar as a safe haven may continue to decline.
