Asian shares rise ahead of inflation tests, oil gains By Reuters

By Wayne Cole

SYDNEY (Reuters) – Asian shares rose cautiously on Monday, while the dollar and bond yields were lower ahead of inflation data that investors hope will pave the way for interest rate cuts in the United States and Europe.

Oil prices rose 0.7 percent after Israel and Hezbollah exchanged volleys of rockets and airstrikes on Sunday, raising concerns about possible supply disruptions if the conflict escalates.

rose 51 cents to $79.53 a barrel, while it added 50 cents to $75.33 a barrel. (OR)

Investors are also eagerly awaiting earnings from AI darling Nvidia (NASDAQ: ) on Wednesday to see if it can match the market’s extremely high expectations.

Shares are up about 150% year-to-date, accounting for about a quarter of the year-to-date gain of 17%.

“Nvidia will beat consensus expectations, they always do, but investors are so fixated on seeing revenue over $2 billion above analyst consensus or we could easily see a news sell event,” said Chris Weston, chief of research at the broker. Pepperstone.

That means Nvidia should report sales of $30 billion or more and third-quarter guidance of $33 billion or more, he added.

Nasdaq futures were also down 0.1 percent early Monday. (.N)

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4 percent after rising 1.1 percent last week, while South Korea rose 0.3 percent.

fell 0.7% as a stronger yen put pressure on exporter inventories.

The yen jumped against a broadly weaker dollar on Friday after Federal Reserve Chairman Jerome Powell said the time had come to begin easing policy and stressed the central bank did not want to see further weakening of the labor market.

“Importantly, there was a notable absence of caveats such as ‘gradualism’ as used by other Fed officials,” noted Tapas Strickland, head of market economics at NAB.

“The September 6 jobs report is clearly important as Powell is willing to cut rates to avoid downside risks to employment and maintain a strong labor market,” he added. “In short, Powell increased the chances of a soft landing.”

THEY WANT A LOT OF CUT

US personal consumption figures and core inflation are due on Friday, along with a quick reading of European Union inflation. Analysts generally assume the data will be benign enough to allow rate cuts in September.

Federal funds futures are fully priced for a quarter-point discount at the Sept. 18 meeting and imply a 36 percent chance of a whopping 50 basis point move. The market also has 103 basis points of price cut for this year and another 122 basis points in 2025.

“We still expect the FOMC to deliver an initial string of three consecutive 25bp cuts at the September, November and December meetings,” Goldman Sachs analysts said.

“Our forecast is based on our assumption that the August employment report will be stronger than the July report, but we continue to believe that, instead, if the August report is weaker than we expect, then it would likely a reduction of 50 bp”.

Markets are also fully pricing in a quarter-point cut from the European Central Bank next month and a total of 163 basis points of easing by the end of 2025.

Two-year Treasury yields were at 3.91 percent, down nearly 10 basis points on Friday, while 10-year yields were flat at 3.79 percent. (US/)

The dollar fell 0.3 percent to 143.97 yen, after falling 1.3 percent on Friday. The euro rose to $1.1190 and near a 13-month high, while the Swiss franc held firm at 0.8472 per dollar. (USD/)

A weaker dollar combined with lower bond yields to support gold at $2,516 an ounce and near an all-time high of $2,531.60. (EMPTY/)