Stocks in Asia hit their highest point in five months as more people bet that interest rates would be cut to boost the economy.
This follows a big rise in U.S. stocks and bonds. The S&P 500 index went up by 14% in just two months, almost reaching its highest level ever.
In Asia, stocks outside Japan also rose by 11% in two months, the highest since August. However, Japan’s Nikkei fell slightly due to a stronger yen.
Investors are optimistic about quick rate cuts by the Federal Reserve, with an 88% chance of a cut by March.
This is a significant change from just a month ago when the probability was only 21%. Analysts predict multiple rate cuts in the coming months.
The bond market also saw changes, with 10-year Treasury yields at a five-month low. This impacted the U.S. dollar, making the euro and other currencies stronger. Gold prices rose, hitting a new closing high, while oil prices were stable.
It’s important to note that this information is sourced from Reuters.
https://www.reuters.com/markets/global-markets-wrapup-1-2023-12-28/