From Bloomberg via Yahoo Finance, August 18/19:
Asian stocks advanced led by a rally in Hong Kong technology shares, while hopes of lower US interest rates pushed the region’s currencies to the highest level in five months against the greenback.
A gauge for Asian shares climbed on Monday, following their best week in over a year. Equity markets in China rose, while an index for Hong Kong tech jumped the most since Aug. 9. Contracts for US equities also climbed. Meanwhile, the Bloomberg Asia Dollar Index gained as much as 0.5%, with the ringgit leading the advance.
Monday’s activity suggests ebbing concerns of a US recession and the prospect of lower borrowing costs are lifting sentiment across the region. The major signpost for the week will be on Friday, when Federal Reserve Chairman Jerome Powell is expected to give fresh insights on the course of US monetary policy at the central bank’s annual confab in Jackson Hole.
“As the recent trading activities are short-term oriented, investors are buying to discount the US rate cut because valuation in Hong Kong looks attractive,” said Steven Leung, executive director at UOB Kay Hian Hong Kong. “Once the cut is confirmed, investors will take short term profits and sell on the good news.”
Goldman Sachs at the weekend trimmed the probability of a US recession in the next year to 20% from 25%, citing last week’s retail sales and jobless claims data. If the August jobs report set for release on Sept. 6 “looks reasonably good, we would probably cut our recession probability back to 15%,” Goldman economists led by Jan Hatzius wrote in a report to clients on Saturday.
Elsewhere in Asia this week, investors will be looking to central bank meetings in Indonesia and South Korea for signs of policy easing, while the Thailand decision will be crucial following reports the nation’s new prime minister may abandon a key stimulus package.
Bank of Japan Governor Kazuo Ueda is scheduled to attend a special session at Japan’s parliament this week....
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