Asia-Pacific Markets Rally as Global Interest Rate Peak Bets Strengthen

Asia-Pacific Markets Rally as Global Interest Rate Peak Bets Strengthen

In a notable surge, Asia-Pacific equities experienced gains on Wednesday, driven by increasing confidence in a global peak in interest rates among major central banks. Bond yields continued their decline, with Japanese government bond yields hitting the lowest since mid-August and U.S. Treasury yields hovering near a three-month trough.

Amidst this, crude oil marked a nearly five-month low, while gold remained steady after stepping back from an all-time high. Bitcoin traded just below $44,000 following its recent ascent to a 20-month peak. The U.S. 10-year Treasury yields held steady at approximately 4.186%, reinforcing that the Federal Reserve has concluded its rate-hiking cycle. The probability of a first-rate cut by March now stands at around 64%, per the CME Group’s FedWatch tool.

Lower borrowing costs propelled equity markets, particularly benefiting major tech stocks. Japan’s Nikkei surged by 1.6%, rebounding from a mid-November low, Australia’s stock benchmark jumped 1.4%, and South Korea’s KOSPI added 0.56%. U.S. stock futures indicated a positive trend, with the Nasdaq, led by tech-heavy companies, up 0.4%. The S&P 500 futures also rose by 0.26%. Chinese equities underperformed, influenced by fragility in sentiment following Moody’s downgrade warning on China’s credit rating. Despite this, Hong Kong’s Hang Seng rose by 0.41%, driven mainly by a tech rally.

With global markets essentially anticipating a cut from the Fed, dovish signals from European Central Bank officials and the Reserve Bank of Australia’s decision to maintain steady policy have fueled expectations of a peak in rates worldwide.

Amid these developments, the U.S. dollar rebounded from last week’s nearly four-month low against major peers. The U.S. dollar index remained steady at around 103.95 on Wednesday. After reaching a record $2,135.40 on Monday, Gold remained flat just below $2,020. Bitcoin, buoyed by expectations of a Fed rate cut and speculation on the approval of exchange-traded spot bitcoin funds, held steady at around $43,850.

Crude oil faced further decline on Wednesday due to a worsening demand outlook from China and doubts about the impact of OPEC cuts. Brent crude futures fell 0.1% to $77.12 a barrel, while U.S. WTI crude futures were down 0.2% at $72.19 a barrel, closing at their lowest since July 6 in the previous session.

TechGolly editorial team led by Al Mahmud Al Mamun. He worked as an Editor-in-Chief at a world-leading professional research Magazine. Rasel Hossain and Enamul Kabir are supporting as Managing Editor. Our team is intercorporate with technologists, researchers, and technology writers. We have substantial knowledge and background in Information Technology (IT), Artificial Intelligence (AI), and Embedded Technology.

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