Investment Manager's Insight: Tech Stocks Drive Asian Markets Higher as ECB Rate Cut Looms
Looking ahead to the European and global markets, Asian stock markets are experiencing a resurgence in investor interest in tech stocks, particularly Nvidia (NASDAQ:). This positive sentiment is bolstered by expectations of a near-certain rate cut by the European Central Bank (ECB) and speculation on future monetary policy decisions.
Despite diminishing hopes for a substantial rate cut by the Federal Reserve next week, the recent U.S. inflation report has provided some clarity. The core CPI rose slightly above expectations in August, signaling that the Fed is likely to opt for a 25 basis points rate cut on Wednesday.
As a result, short-term yields have increased, leading to a stronger dollar against the yen. The weakened yen has pushed the Nikkei almost 3% higher, despite hawkish comments from a Bank of Japan official.
Heading into the ECB policy decision, European markets are poised for solid gains. EUROSTOXX 50 futures have surged 1.2%, with the DAX gaining 1%. While a quarter-point cut by the ECB is widely anticipated, the possibility of further cuts in October and December remains uncertain.
Market analysts are closely watching ECB President Christine Lagarde's post-meeting briefing for insights into future monetary policy decisions. Attention will then shift to U.S. weekly jobless claims and producer price data, which could impact market sentiment.
Key developments to monitor on Thursday include:
- ECB policy meeting and briefing by President Christine Lagarde
- U.S. weekly jobless claims
- U.S. Producer Price Index (PPI)
Stay tuned for further market updates and analysis by Stella Qiu, the world's leading financial market journalist.