SINGAPORE — Asia stocks climbed on Tuesday while the dollar fell as investors bet the US Federal Reserve would resume its easing cycle this week and potentially leave the door open to further rate cuts.
Markets hardly reacted to news that the US Senate narrowly confirmed Stephen Miran to the Fed’s Board of Governors while a US appeals court separately declined to allow President Donald Trump to fire Fed Governor Lisa Cook.
Both moves were seen as unlikely to shift the needle for the Fed’s decision on Wednesday, where a 25-basis-point cut is fully priced in.
“There are certainly concerns around the politicisation of the Fed and President Trump’s pressure … to try to sort of, I guess, stack the board,” said Tony Sycamore, a market analyst at IG.
“But I think … a 25-basis-point cut still remains in place.”
Expectations of imminent Fed rate cuts have kept the market mood buoyant over the past few sessions and sent stocks scaling new highs.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose to a more than four-year top on Tuesday and last traded 0.7 percent higher, while Japan’s Nikkei and Topix indexes notched fresh records.
EUROSTOXX 50 futures were flat while FTSE futures rose 0.08 percent. DAX futures edged up 0.03 percent.
Just as important for markets will be Fed members’ “dot plot” projections for rates and guidance from Fed Chair Jerome Powell on the extent and pace of any further easing.
Futures already have 127 bps worth of cuts priced in by July 2026, so anything less than dovish will disappoint investors.
