SYDNEY- Asian shares edged higher on Wednesday as anxious investors dared to hope AI-diva Nvidia could meet sky-high expectations, while also keeping a wary eye on the outlook for US and UK interest rates.
New Zealand’s central bank offered a sobering assessment of its inflation problems, warning that rates would have to be higher for longer to bring them to heel in a shock to local markets.
That saw the kiwi dollar jump 0.9 percent to a one-month high of $0.6151 as bond yields spiked, while it surged to 17-year peaks on the relatively low-yielding yen
MSCI’s broadest index of Asia-Pacific shares outside Japan firmed 0.4 percent , having already climbed for four straight weeks to reach a two-year top.
Chinese blue chips were little changed, just below a seven-month top hit at the start of the week.
Japan’s Nikkei eased 0.8 percent as data showed a weak yen was boosting exports but also stoking imported inflation and weighing on business sentiment.
EUROSTOXX 50 futures and FTSE futures both inched up 0.1 percent . S&P 500 futures and Nasdaq futures barely budged.
Markets are braced for fireworks when Nvidia reports after the bell, with options priced for a swing of 8.7 percent in either direction, worth $200 billion in market value.
Analysts wonder how much more it can deliver given that the chip-maker already boasts a profit margin of 77 percent , and its stock is up 93 percent on the year so far.
“Sentiment is quite positive, with our bars well-above consensus and a sense that management has left some in the tank to surprise positively,” said JPMorgan analyst Josh Meyers.
“This suggests that it may take a big upside surprise, on earnings or clearer forward guidance, to get the stock moving any higher.”
Minutes of the US Federal Reserve’s last meeting due later in the day should confirm the next move is still likely down, but policy makers first need more confidence that inflation has resumed its downtrend.
