Asia shares rise on rate cut bets; RBA seen turning hawkish
Asian shares made 15-month highs on Tuesday on renewed confidence of U.S. interest rate cuts, while traders waited on a policy meeting in Australia later in the day and had a close eye on a falling yen.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.3% in early trade. Hong Kong shares traded marginally lower, having ridden a wave of heavy buying from mainland investors to lift the Hang Seng index more than 14% higher in a 10-day winning streak, its longest since 2018.
Japan's Nikkei gained 1.3% and S&P 500 futures were steady after the cash index logged a 1% rise overnight. [.N]
The mood was underpinned by last week's softer-than-expected U.S. jobs data and remarks from Federal Reserve Chair Jerome Powell reiterating that the next move in rates will be lower.
"(Powell) said that he is confident policy is restrictive and that if progress on inflation stalled, the (Fed) would hold off on cutting, implying a high bar to hiking," said Goldman Sachs economist David Mericle.
He also said, in a note to clients, that the U.S. hiring rate and other measures of employment growth intentions were soft and the weakest part of labour market data.
Treasuries, which rallied on Friday's jobs figures, traded steady in New York overnight and 10-year yields held at 4.49% in Tokyo on Tuesday. Interest rates markets price at least one U.S. rate cut this year, in November.
Demand will be tested at a $58 billion three-year note auction on Tuesday, which is followed by $42 billion in 10-year sales on Wednesday
