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Stephen Innes, managing director of SPI Asset Management, noted that the ringgit's recent rally extends beyond the typical US-Malaysia interest rate differential. He attributes much of the current momentum to China’s stimulus initiatives, which have put the currency in a delicate position as its strength increasingly hinges on the prospects for China’s economic recovery.
Investors in Tokyo were buoyed by the U.S. market’s positive performance, which has increasingly led to speculation that the Fed might ease its monetary policy in response to softening economic indicators.
The recovery was largely attributed to a speech delivered by Bank of Japan (BOJ) Deputy Governor Shinichi Uchida, who assured investors that the central bank would maintain its ultra-loose monetary policy.
High-yield corporate bonds experienced a sharp increase in spreads, jumping by about 80 basis points to over 370 basis points above risk-free Treasurys, following a weak U.S. jobs report that pushed the unemployment rate to 4.3%, a three-year high. This volatility has left investors navigating significant uncertainty in the bond market.
The STI, which tracks the performance of Singapore's top companies, closed sharply lower, driven by investor concerns over the implications of possible changes in U.S. monetary policy. The recent sell-off comes amidst growing discussions in financial circles about whether the Federal Reserve will implement rate cuts to address economic slowdowns and inflationary pressures in the United States.
Market participants are closely monitoring the BOJ’s announcements, with the central bank scheduled to release its quarterly outlook on inflation and economic growth alongside any policy changes on Wednesday. Despite some recent signs of inflation, including a yen rally and stock market declines, the prevailing sentiment suggests that the BOJ will prioritize economic recovery over immediate monetary policy shifts.
Qatar National Bank (QNB) predicts that the U.S. Federal Reserve will continue cutting interest rates due to declining inflation.
South Korean stocks slipped over 1% as fears of a prolonged high-rate policy by the U.S. Federal Reserve rattled investors. Tech giant Samsung Electronics saw a 2.3% dip following reports of chip testing failures.
South Korean stocks surged over 2% fueled by hopes for U.S. rate cuts. KOSPI closed at 2,734.36, with tech giants like Samsung Electronics and SK Hynix leading gains. The local currency strengthened against the U.S. dollar.
South Korean stocks experienced a slight decline, influenced by a drop in semiconductor stocks following the announcement of fourth-quarter earnings by chip giant Samsung Electronics.
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