SYDNEY- Major share markets turned hesitant in Asia on Monday, while the dollar and bond yields were on the wane ahead of inflation data that investors hope will pave the way for rate cuts in the United States and Europe.
Oil prices climbed 0.7 percent after Israel and Hezbollah traded rocket salvos and air strikes on Sunday, stirring worries about possible supply disruptions if the conflict escalated.
Brent rose 51 cents to $79.52 a barrel, while US crude added 50 cents to $75.33 per barrel.
Investors are also anxiously awaiting earnings from AI darling Nvidia on Wednesday to see if it can match the market’s uber-high expectations.
The stock is up some 150 percent year-to-date, accounting for around a quarter of the S&P 500’s 17 percent year-to-date gain.
“Nvidia will beat consensus expectations, they always do, but investors are so ingrained in seeing revenue come in $2 billion plus above the analysts’ consensus or we could easily see a sell the news event,” said Chris Weston, head of research at broker Pepperstone.
That means Nvidia would have to report sales of $30 billion or more and guidance for the third quarter of $33 billion or above, he added.
On Monday, S&P 500 futures and Nasdaq futures were both near flat in slow trade.
EUROSTOXX 50 futures dipped 0.3 percent , while FTSE futures were closed for a holiday.
MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.6 percent , after rising 1.1 percent last week, while South Korea fell 0.2 percent . Chinese blue chips lost 0.4 percent .
Japan’s Nikkei fell 0.8 percent as a stronger yen pressured exporter stocks.
The yen has jumped on a broadly weaker dollar after Federal Reserve Chair Jerome Powell said the time had come to start easing policy and emphasized the central bank did not want to see further weakening in the labor market.
“Importantly there was a notable absence of caveats such as ‘gradual/gradualism’ as used by other Fed officials,” noted Tapas Strickland, head of market economics at NAB.
“The jobs report on September 6 is clearly important as Powell is willing to cut rates to ward off downside risks to employment and to maintain a strong labor market,” he added.
“In summary, Powell has increased the chances of a soft landing.”
