Shares rise ahead of Nvidia results; BOJ’s Ueda offers several price hints via Reuters

Written by Rae Wee

SINGAPORE (Reuters) – Global stocks started the week on a strong note ahead of Nvidia’s (NASDAQ: ) highly anticipated earnings release, while in Japan, a speech from the head of the central bank left markets on a more cautious note on the country’s price outlook.

Bank of Japan Governor Kazuo Ueda reiterated on Monday that the central bank will continue to raise interest rates if economic development and prices are in line with its forecasts, but he did not say anything about the possibility of a rate hike in December.

His speech was watched by investors for clues to the next rate hike by the BOJ, which could be seen as a way to reverse the yen’s weakness.

The Japanese currency has fallen 7% since October against the renewed dollar and last week fell past the $156 level for the first time since July, keeping traders wary of any intervention by Japanese authorities.

It ended down 0.3% at 154.72 per dollar, paring some of the losses it made as Ueda spoke.

On the possibility of a BOJ hike next month, IG market analyst Tony Sycamore said “it will depend on when the dollar/yen reaches the level”.

“If the dollar/yen goes up to around 160, I think that will increase (the chances of) a rate hike. But I think he’s probably not happy with the dollar/yen sitting around 150, 152. I think that probably keeps him on the sidelines. next year.

“It’s coming, it’s just a matter of … the Japanese economy doing well.”

Despite the weak yen, it fell 0.76%, dragged down by the decline in shares of healthcare companies.

MSCI’s broadest index of Asia-Pacific shares outside Japan, meanwhile, advanced 0.7%.

Similarly, Nasdaq futures gained 0.6%, while they rose 0.25%.

The highlight for investors this week will be Nvidia’s third-quarter results on Wednesday, when analysts expect the intelligence chip leader to record a jump in revenue.

Shares of Nvidia are up nearly 200% this year, with their heavy weight partly responsible for charging the index to record highs this year.

But its lucky multi-year performance has also raised earnings volatility and the slide could fuel worries that the market’s AI hopes are outpacing reality.

Elsewhere, Chinese stocks opened higher on Monday. The blue-chip index last gained 1.22%, while jumping 1.34%.

Hong Kong rose 1.5%.

TRUMP AND RETHA

US Treasury yields held close to multi-month highs on Monday, bolstered by bets that the Federal Reserve’s less aggressive rate cuts are down the line. [US/]

The average 10-year yield fell to 4.4315%, while the two-year yield settled at 4.2990%.

Futures mean a 60% chance the Fed will cut by a quarter-point in December and has only a 77-point chance of cutting rates by late 2025, compared to more than 100 a few weeks ago.

This came after Chairman Jerome Powell’s comments last week indicated that borrowing costs could remain high for a long time, and with the view that President-elect Donald Trump’s policies of tax cuts, reduced immigration and debt-financed tax cuts will increase inflation. , which limits the scope for further expansion of the policy.

“As there are ongoing changes in immigration policy, tax policy, and monetary policy, Fed officials will tread lightly anyway given the inflationary impact of these policies, and the need to keep real policy interest rates higher than otherwise, as a result,” Thierry said. Wizman, global FX and pricing strategist at Macquarie.

At least seven Fed officials will speak this week and traders are expected to sound cautious about aggressive cuts.

The change in US price sentiment and inflation has boosted the dollar, which has risen in line with US Treasury yields.

Against a basket of currencies, the greenback hovered near a one-year high of 106.66.

Sterling was last bought at $1.2640, having weakened last week, while the euro was up 0.03% at $1.0543.

A host of European Central Bankers are also speaking this week and it may sound like a no-brainer given the soft economic data and the risk of Trump’s proposed tariffs affecting EU trade.

In commodities, oil prices firmed on Monday. Futures rose 0.18% to $71.17 a barrel, while futures were little changed at $67.05 a barrel. [O/R]

jumped 1.24% to $2,593.02 an ounce, recovering from last week’s sharp decline. [GOL/]