MSCI’s broadest index of Asia-Pacific shares was just 0.06% lower on Friday, following a 1.88% drop the previous day
The yen stabilized near a 12-week high against the dollar on Friday while Asia-Pacific equity markets were steady, a day after their worst session since mid-April.
MSCI’s broadest index of Asia-Pacific shares was just 0.06% lower on Friday, following a 1.88% drop the previous day.
Much of the weakness emanated from Taiwan, which reopened from a two-day closure due to a typhoon to plunge 3.53% as the tech-heavy equity index caught up with the rout in the rest of the world since mid-week.
Japan’s Nikkei dropped 0.12% after failing to sustain earlier gains, but Australia’s benchmark gained 0.79% and South Korea’s Kospi added 0.89%.
Hong Kong’s Hang Seng gained 0.21% while mainland blue chips were flat.
U.S. stock futures pointed higher after two days of selling in the cash indexes, with S&P 500 futures gaining 0.43% and Nasdaq futures adding 0.53%.
Pan-European Stoxx 50 futures gained 0.17%.
U.S. economic data from overnight gave some cause for optimism, with economic growth faster than expected in the second quarter and inflation dropping. That helped dispel concerns that the expansion was in danger of an abrupt end, while also supporting wagers for a Fed interest rate cut in September.
Friday’s release of the PCE deflator, one of the Fed’s preferred price gauges, will be “the next test, and arguably climax to the week’s trade”, according to Kyle Rodda, a senior market analyst at Capital.com.
There are concerns about upside risk to the current consensus estimate for the PCE Index, Rodda added.
While a modest upside surprise would not necessarily derail the path back to the target of inflation, it could impact the anticipated timing of the first Fed cut and the number of cuts that could come over the next six months. That could rattle the markets at a time when sentiment is already a little cautious, he added.
