Asian stocks advance, Jackson Hole in focus: Market recap

(Times of Update) — Asian stocks advanced Monday as traders looked ahead to the Federal Reserve’s annual meeting in Jackson Hole for any signals on the future path of interest rates.

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Stock indexes across the region rose, extending Friday’s gains. Chinese stocks advanced, led by technology stocks. Japanese stocks were mixed and Australian stocks edged lower. U.S. futures were higher in Asian trading after the S&P 500 rose 0.2% on Friday. The dollar was little changed, while Treasury yields rose.

Monday’s figures come before U.S. jobless claims and economic data, while Federal Reserve Chairman Jerome Powell is expected to provide fresh outlook on the direction of monetary policy during a speech in Wyoming. The meeting caps a period of volatility for global stocks, fueled in part by concerns that the Fed will not cut borrowing costs quickly enough to prevent a deeper U.S. slowdown.

“It’s almost impossible for him to avoid the topic of future rate cuts,” Homin Lee, senior macro strategist at Banque Lombard Odier & Cie SA in Singapore, told Times of Update Television. “We think he’s going to drop some hints.”

Goldman Sachs cut the probability of a U.S. recession next year to 20% from 25% over the weekend, based on data on retail sales and jobless claims released last week. If the August jobs report, due out Sept. 6, “comes out reasonably well, we would likely reduce our recession probability to 15%,” Goldman economists led by Jan Hatzius wrote in a report to clients Saturday.

Fading signs of a U.S. recession have pushed emerging market currencies higher. Times of Update’s Asian dollar index gained as much as 0.5 percent on Monday to its highest level since March, with the Thai baht and Malaysian ringit leading the region’s gains.

Elsewhere in Asia this week, investors will be watching central bank meetings in Indonesia and South Korea for signs of monetary policy easing, while Thailand’s decision will be crucial after reports that the country’s new prime minister may abandon a key stimulus plan.

Bank of Japan Governor Kazuo Ueda is expected to attend a special session of Japan’s parliament this week to discuss the July 31 rate hike that has rattled global markets. At the same time, hedge funds have turned bullish on the Japanese currency for the first time since 2021, marking a sharp turnaround from the extremely negative sentiment seen among such traders in early July.

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In China, authorities are expected to keep prime rates on one- and five-year loans unchanged on Tuesday, after the People’s Bank of China last week pledged new measures to support the economic recovery, while warning it would not adopt “drastic” measures.

In commodities trading, oil fell for the fourth time in five sessions as traders tracked U.S. efforts to broker a 10-month-old ceasefire in the Middle East while the war between Russia and Ukraine intensified. Gold wavered near a record high on hopes the Fed would move closer to the euro zone.