Asia shares touch two-year top as China plans property boost

SINGAPORE: Asian shares started the week by rallying two-year highs on Monday, buoyed by China’s strongest measures yet to address its property crisis and by expectations for global rate cuts within weeks, while the dollar steadied after a weekly drop.

Brent crude futures touched a one-week high of $84.14 a barrel in early trade, with the crash, in heavy fog, of a helicopter carrying Iran’s president drawing traders’ attention to the Middle East.

Gold hovered close to a record high at $2,423 an ounce. Japan’s Nikkei rose 0.9% in early trade.

Hang Seng futures pointed to gains and MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.25% to a two-year top with early gains in Australia and South Korea.

After world stocks made record highs last week in the wake of softening US inflation, focus this week turns to policy speeches, meeting minutes, a central bank decision in New Zealand and Nvidia results, with a break in the data calendar.

“Whether this summer continues will require more than one swallow flying, it will require the confidence of central bankers and more economic proof,” said Bob Savage, BNY Mellon’s head of markets strategy and insights in a note to clients.

“The week ahead will pivot on the Fed speakers and (Fed) minutes in how they paint the picture of policy risks ahead, with a bias to ease rather than hike essential,” he said.

Late last week, partly in response to some policymakers’ comments, global bonds retraced a rally that had followed an encouraging fall in US CPI data. US Federal Reserve Governor Michelle Bowman reiterated her view that she remains willing to hike rates should progress on taming inflation stall or reverse.

Asian stocks ease on uncertainty over timing of US rate cuts

European Central Bank board member Isabel Schnabel said the June rate cut that markets have priced in for Europe “may be appropriate” but seemed to pour cold water on traders’ expectations for a series of cuts to follow.

Two-year US Treasury yields ended last week four basis points (bps) lower at 4.825% and were steady in Asia trade.

Ten-year US yields were down 8.4 bps last week to 4.42%. Two-year bund yields went up 2 bps to 2.988%.