Most Asian stocks advance as attention turns to US Fed chief Kevin Warsh’s speech
Investors will be parsing for clues about the outlook for interest rates.
On August 28, Asian stocks saw mostly gains ahead of US Federal Reserve Chair Kevin Warsh's speech, as investors sought insights on interest rate outlook amid high inflation and ongoing Middle East conflict. After the excitement from Nvidia's earnings report waned, economic concerns took center stage, with debates pointing to the timing and extent of potential Fed rate hikes.
The July Fed meeting maintained interest rates, but three dissenting members advocated for a hike; despite a slight easing of inflation figures, it remained well above the 2% target. A spike in energy costs due to Iran's war added to worries that high prices would persist, putting upward pressure on long-term Treasury yields and raising borrowing costs.
Traders awaited Warsh's speech at the Jackson Hole central bankers conference to gauge decision-makers' thinking. However, his last appearance was criticized for ambiguity, leaving investors disappointed by a lack of forward guidance. Stephen Innes from Quintex Intel called Warsh's address "the most consequential central bank speech left this year", occurring nearly three weeks before the upcoming policy announcement.
Recent data had reduced the immediate need for tighter policy, allowing Warsh to re-emphasize the Fed's inflation-fighting stance without signaling imminent action. Asian markets opened higher, with tech firms struggling to maintain the momentum from Nvidia's strong earnings, which had earlier fueled a rally. Tokyo, Hong Kong, Shanghai, Sydney, Singapore, Jakarta, and Taipei all rose, while Seoul declined along with Wellington and Manila.
Wall Street had initially boosted markets, but gains were solely driven by the tech sector, which was the only one of 11 major indices to increase. Oil prices edged lower but remained vulnerable to another spike as investors awaited progress in reopening the Strait of Hormuz, a key oil passageway through which about a fifth of global oil flows.
US officials have vowed continued economic pressure to force Iran to open the waterway, but diplomatic solutions remain elusive.
Written by urgent.news from Straits Times Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
