Asian stocks are poised for a fifth consecutive month of gains, supported by expectations that cooling inflation may lead the Federal Reserve to reduce interest rates this year.
Asian markets showed little reaction to the first US presidential debate between Democratic President Joe Biden and Republican rival Donald Trump ahead of the November election.
MSCI’s broadest index of Asia-Pacific shares outside Japan increased by 0.4% and is on track to gain over 3% for the month, marking its best performance since February.
US stock futures and the dollar rose as investors perceived higher chances of a Trump win, while the yen dropped to a 38-year low against the dollar.
Andrew Lilley, chief interest rate strategist at Barrenjoey, remarked, “There’s a big debate on whether that would be good news or bad news for equity markets, but I can tell you that for bond markets, the consensus is clear. If Trump were to win the election, interest rates would likely increase.”
On Wall Street, the S&P 500 managed a 0.1% gain, hovering near the all-time high it reached last week.
The Nasdaq Composite rose by 0.3% and remains just below its all-time high, while the Dow Jones Industrial Average closed 0.1% higher.
Gains in retailers and communications services companies helped offset losses in consumer goods makers, financial stocks, and other sectors. Amazon rose by 2.2% and Meta added 1.3%.
In the bond market, US Treasury yields fell. The yield on the 10-year Treasury, which affects interest rates on mortgages and other consumer loans, dropped to 4.28% from 4.33% late Wednesday. The yield on the two-year Treasury fell to 4.71% from 4.75%.
