Friday's dovish speech by Jerome Powell is still sending markets higher during today's Asian session.
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- Markets are still focused on last Friday's major event: the speech by Jerome Powell in which he is making a dovish tilt towards faster rate cuts. The CME Fed Watch tool is now showing markets expecting an 87% chance of a 0.25% rate cut at the next September meeting, and a 43% chance of a further cut of the same amount at the meeting following that. This is a tilt in favour of stronger rate cut expectations and this has helped to boost risky assets, with major US stock market indices trading higher on Friday as a result. As markets opened in Asia today, we have seen Asian stocks also move higher, with the NASDAQ Asia Index rising to a new record high, the Japanese Nikkei 225 Index is up by more than 0.4% but the Chinese HSI is up by well over 2%.
- The cryptocurrency Ethereum reached a new all-time high on Sunday at $4,955 but has since fallen back quite convincingly.
- The major US stock market index the S&P 500 Index has retreated a little in off hours trading today, but closed very near its record high last Friday, and could well be set for a strong bullish breakout today. The next major barrier will be the magic 5,000 level.
- It is likely to be a quiet day in the markets as it is a Monday with no major economic data releases or events scheduled.
- It is a public holiday in the UK today, so trading in the British Pound is likely to have thin liquidity.