Stocks were muted, the dollar steadied near five-week lows, and gold climbed to record highs on Tuesday, as investors awaited economic data this week that could reinforce expectations for a Federal Reserve rate cut in September.
Reuters reported that markets widely expect the Fed to lower interest rates later this month, pricing in an 89% chance of a 25 basis point cut, but data this week will help investors gauge whether the central bank could perhaps lean toward a jumbo cut.
The focus will be on Friday’s U.S. nonfarm payrolls report, which will be preceded by data on job openings and private payrolls, providing investors and the Fed a clearer picture of the labour market that has become the centre of policy debate.
The U.S. inflation report for August, scheduled to be released on September 11, a week before the Fed’s policy meeting, will play a crucial role in determining the central bank’s next steps.
The prospect of lower borrowing costs has kept Wall Street near record highs, while stocks in other regions have also gained in recent weeks. On Tuesday, MSCI’s broadest index of Asia-Pacific shares outside Japan was flat.
Nasdaq futures fell 0.1% while European futures eased 0.07%. U.S. markets were closed on Monday for a holiday, leaving few cues for Asian markets.
China stocks have been on a tear recently, buoyed by AI enthusiasm, but fell on Tuesday as investors locked in profits following the sharp rally.
The blue-chip CSI300 index fell 0.9% after hitting a three-year high for the third straight session earlier on Tuesday. Hong Kong’s Hang Seng index eased 0.6% after surging 2% on Monday.
In currencies, the dollar clawed back some of its losses ahead of the European open. The euro fell 0.16% at $1.16925, while sterling was at $1.35264, down 0.17%.
The yen weakened 0.3% to 147.70 per dollar after Bank of Japan Deputy Governor Ryozo Himino said the central bank should keep raising interest rates but warned that global economic uncertainty remains high, suggesting it was in no rush to push up still-low borrowing costs.
The dollar index, which measures the U.S. currency against six others, was 0.2% higher at 97.847, but still near the five-week low it hit on Monday. The yield on benchmark U.S. 10-year notes was 2.4 basis points higher at 4.249%.
