Asian shares steady as more interest rate cuts loom By Reuters

By Wayne Cole

SYDNEY (Reuters) – Asian shares were flat on Monday ahead of central bank meetings expected to produce two more interest rate cuts and key U.S. inflation figures that should greenlight more easing there.

A holiday in Japan made for light trading and MSCI’s broadest index of Asia-Pacific shares outside Japan was little changed after rebounding 2.7 percent last week.

was closed, but futures were trading at 38,300, compared with a cash close of 37,723. The index rose 3.1 percent last week as the yen retreated from a high and the Bank of Japan (BOJ) signaled it was in no rush to tighten policy further.

and Nasdaq futures both rose 0.1%. The S&P is up 0.8% so far in September, historically the weakest month for stocks, and has gained 19% year-to-date to hit all-time highs.(.N)

More than 20 billion shares changed hands on Friday in US stock markets, the busiest session since January 2021. Analysts at BofA noted that the S&P rises an average of 21% when there is no recession in the 12 months from start of Fed tapering.

Markets were still basking in the afterglow of the Federal Reserve’s interest rate halving, with futures implying a 51% chance of another big move in November.

“While the move was well signaled, its importance is hard to overestimate given the Fed’s role in global USD liquidity conditions,” said Barclays economist Christian Keller.

“We note that starting a cycle with a 50bp move without an imminent financial crisis or actual job losses is quite unusual for the Fed,” he added. “We thus believe the move reveals the Fed’s determination to avoid a deterioration in labor market conditions, or in market jargon: to achieve a soft landing.”

At least nine Fed policymakers are speaking this week, including prepared remarks from Chairman Jerome Powell, two governors and New York Fed President John Williams.

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Much will depend on the Fed’s preferred inflation gauge, core personal consumption expenditure (PCE) data showed on Friday. Analysts expect a 0.2% month-on-month rise, taking the annual pace to 2.7%, while the main index will slow to just 2.3%.

Next week also includes surveys on global manufacturing, US consumer confidence and durable goods.

The Swiss National Bank meets on Thursday and markets are fully pricing in a quarter-point cut to 1.0%, with a 41% chance of a 50 basis point cut.

Sweden’s central bank meets on Wednesday and is also expected to cut by 25 basis points, again with some chance of a hike.

One bank not relaxing is the Reserve Bank of Australia (RBA), which meets on Tuesday and is seen as almost certain to keep rates at 4.35% as inflation proves stubborn. (0#RBAWATCH>

Investors were also keeping an eye on negotiations to avoid a US government shutdown just days before the current $1.2 trillion fund runs out on September 30. The Republican Speaker of the US House of Representatives, Mike Johnson, proposed three months of temporary funding on Sunday. bill, but now it has to go to a vote.

In currency markets, the dollar rose to 143.95 yen, having recovered 2.2 percent from a low of 139.58 last week. The euro gained nearly 3 percent last week to 160.71 yen, while holding firm against the dollar at $1.1163.

Japan’s LDP, which has a parliamentary majority, will elect a new leader on September 27, with the winner replacing incumbent Prime Minister Fumio Kishida.

The US interest rate cut, combined with lower bond yields, helped keep gold at $2,620 an ounce, just off an all-time high of $2,625.59. (EMPTY/)

Net long positions on the Comex hit a four-year high last week, suggesting some risk of a near-term pullback.

Oil prices were steady after rising about 4 percent last week on hopes that lower borrowing costs will support economic growth and global demand. (OR)

added a cent to $74.47 a barrel, while firming a cent to $71.01 a barrel.