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Global equity/currency market update: Asian Shares Edge Higher as Investors Anticipate Nvidia Earnings and Monitor Interest Rates

22 May 2024 8:58 am
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Mumbai, 22 May (Commoditiescontrol): Asian shares saw modest gains on Wednesday as investors held their breath ahead of Nvidia's earnings report, while keeping a close watch on interest rate forecasts in the U.S. and UK.

New Zealand's central bank delivered a stern message about its inflation struggles, indicating that higher interest rates would persist longer than expected. This announcement caused the kiwi dollar to surge 0.9% to a one-month high of $0.6151, while bond yields also spiked.

The MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.4%, continuing a four-week climb to a two-year high. In contrast, Japan's Nikkei slipped 0.6% as data revealed that a weak yen was boosting exports but also increasing imported inflation, which affected business sentiment.

In Europe, futures for the EUROSTOXX 50 and FTSE each rose 0.2%. Similarly, S&P 500 and Nasdaq futures were slightly up as markets prepared for Nvidia's post-bell earnings report. The chipmaker's performance could cause a significant market shift, with options pricing a potential 8.7% swing, translating to $200 billion in market value. Analysts question Nvidia's potential for further growth given its impressive 77% profit margin and a stock increase of 93% this year.

Later in the day, the minutes from the U.S. Federal Reserve's last meeting are expected to suggest a likely rate cut, contingent on continued signs of easing inflation. Fed fund futures indicate a 66% chance of a rate cut by September, with 43 basis points of easing priced in for the year.

UK inflation data, due later, could influence the Bank of England's decision on whether to cut rates in June or wait until August. Forecasts predict a drop in core consumer price inflation to 3.6% in April from 4.2% in March. A lower figure could increase the likelihood of a June rate cut, potentially affecting the sterling, which was near a two-month high at $1.2712. The euro remained steady at $1.0857, just shy of its recent peak of $1.0895.

The dollar held steady against the yen at 156.20 as potential Japanese intervention loomed. Gold prices remained firm at $2,424 an ounce after hitting a record high of $2,449.89 earlier in the week.

Oil prices dipped amid concerns about U.S. demand during the peak driving season, with Brent crude falling 50 cents to $82.38 a barrel and U.S. crude down 54 cents to $78.12 per barrel.

(By Commoditiescontrol Bureau: 09820130172)

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