European equity futures pointed toward a positive start after the S&P 500 closed at a new record high amid optimism about potential Federal Reserve interest-rate cuts. However, trading in Asia was subdued with a number of markets closed for the Lunar New Year. While contracts for the Euro Stoxx 50 suggested the benchmark was likely to continue its upward trajectory, several markets in the region, including Australia, New Zealand, India, and the Philippines, saw equity prices decline due to a lack of market catalysts. Additionally, such Asian financial hubs as Japan, China, Hong Kong, Singapore, Taiwan, South Korea, Malaysia, and Vietnam were also shut for holidays. That caused US futures to remain relatively flat.
The yen held close to a two-month low reached on Friday after comments from central bankers indicated that the Bank of Japan will adopt a patient approach before raising rates. Meanwhile, Bitcoin remained relatively stable following its upward trend toward $49,000, reaching its highest levels since mid-January, coinciding with the introduction of several US spot exchange-traded funds. Additionally, the annual US inflation rate is expected to have decreased to 2.9% in January from 3.4% in the prior month. This will provide further clarity to investors on the Fed’s future policy decisions.
The US stock market surged to new heights despite the deferral of expectations for a shift in Fed policy following relatively optimistic comments from central bankers, as well as economic data that indicated no immediate need for an interest-rate cut. Escalating war conditions in Gaza and hopeful diplomatic negotiations led to oil price declines, signaling that a peaceful resolution may be underway. Asian financial markets are looking forward to the release of inflation and industrial output reports for India. Additionally, several key events are expected to occur later in the week, including the release of the US consumer price index and retail sales, as well as the Philippines’ central bank meeting on interest rates. This information is in line with the latest MarketWatch article provided by Bloomberg.