Stocks Fall, Dollar Holds Firm as Fed Focus Intensifies; cryptocurrencies are soaring

Stocks Fall, Dollar Holds Firm as Fed Focus Intensifies; cryptocurrencies are soaring
Stocks Fall, Dollar Holds Firm as Fed Focus Intensifies; cryptocurrencies are soaring

Asian stocks fell while the dollar remained firm on Tuesday as investors waited for minutes from the Federal Reserve’s latest policy meeting to assess the timing and extent of possible interest rate cuts this year.

The Japanese Nikkei, with a strong technology component, however rose slightly, driven by stocks in the chip sector after the Nasdaq reached a record level overnight, in anticipation of Nvidia results expected on Wednesday.

Gold moved closer to Monday’s all-time high, while crude oil prices fell on concerns that U.S. interest rates will remain high for longer, with Fed officials remaining cautious over the recent easing of inflation.

Cryptocurrencies Ether and Bitcoin hit new six-week highs amid expectations that the US Securities and Exchange Commission (SEC) will approve an exchange-traded fund (ETF) ) for spot ether.

Markets are currently pricing in about 41 basis points of Fed rate cuts this year, with a quarter-point cut fully scheduled for November.

Traders rushed to reinstate bets on easing after data earlier this month showed consumer price pressures eased in April, following a three-month string of upward surprises in beginning of the year.

Vice President Philip Jefferson said Monday it was too early to say whether the slowdown was “sustainable,” and Vice President Michael Barr said the restrictive policy needed more time.

MSCI’s broadest index of Asia-Pacific stocks outside Japan fell 0.6%, weighed down by the Hang Seng’s decline of more than 1% from Monday’s multi-month peak.

Japan’s Nikkei was a rare bright spot, rising 0.2%, adding to the previous day’s 0.73% rise.

Nasdaq futures fell 0.1% after the index rose 0.65% overnight to close at a record high. S&P 500 futures were flat following Monday’s 0.1% gain.

“Market sentiment remains relatively robust, with low implied volatility, supported by greater confidence in U.S. rate cuts this year,” Kyle Rodda, senior markets analyst at, wrote in a note.

At the same time, the records reached by metals such as gold and copper “are seen as a sign of improving economic activity globally, which could be a factor in maintaining inflation” , said Mr. Rodda.

Gold fell 0.2% to around $2,420 an ounce, after hitting the $2,450 mark for the first time overnight.

The dollar strengthened slightly against other currencies on Tuesday, with the dollar index up 0.1% at 104.69 after a similar rise on Monday.

The 10-year Treasury yield was little changed at 4.4453%, after rising 1.7 basis points on Monday.

Brent oil futures fell 12 cents, or 0.1%, to $83.34 a barrel, while West Texas Intermediate (WTI) oil fell 8 cents, or 0.1%, at $79.72 per barrel.

Meanwhile, Monday’s top-performing markets continued their ascent as traders snapped up cryptocurrencies following a report that the SEC abruptly asked exchanges that want to trade ether ETFs to update regulatory filings, spurring bets that approval could come this week.

Bitcoin climbed as high as $71,957 and ether jumped to $3,720.80, both reaching levels not seen since April 9.

“Speculation around the ether ETF certainly played a role in this move, adding fuel to the fire of the cryptocurrency bull market that had reignited after the colder US CPI data from the last week,” said IG analyst Tony Sycamore.

Mr Sycamore expects bitcoin to hit the all-time high of $73,803.25 again in the coming days, before attempting to reach $80,000.



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