Federal Reserve System Expected to Cut Rate Of Interest In July

Stocks in the Asia Pacific have been mixed on Thursday as worse than anticipated U.S. economic data raised expectations the U.S. Federal Reserve may cut rates of interest at its upcoming July assembly.

The Nikkei 225 closed 0.3% higher at 21,702.45 as shares of index heavyweight Softbank Group jumped more than 3%, whereas the Topix gained 0.65% to complete its trading day at 1,589.78.

In South Korea, the Kospi advanced 0.61% to shut at 2,108.73, while Australia’s S&P/ASX 200 added 0.49% to finish its trading day at 6,718.00.

Shares in mainland China slipped on the day, with the Shanghai composite moving 0.33% to 3,005.25 and the Shenzhen component 0.55% decrease to 9,368.30. The Shenzhen composite additionally declined 0.548% to 1,591.24.

In Hong Kong, the Grasp Seng index was fractionally lower, as of its final hour of trading.

“Last month, the Federal Reserve stated they’re near cutting rates of interest; however, how quickly they move depends on data. In that case, there is no single economic report as vital as the jobs report,” Lien stated. “If employment growth falls short of expectations, the market might instantly move to price in a July rate of interest cut.”

In the meantime, White House economic adviser Larry Kudlow mentioned Wednesday that face-to-face negotiations between the U.S. and China would start “soon.”

Investors are waiting for developments as the two economic powerhouses remain locked in a trade battle, with Kudlow’s comments coming days after U.S. President Donald Trump and Chinese President Xi Jinping agreed not to apply new tariffs on each other’s items.

However, Neil Dwane, global strategist at Allianz Global Investors stated “Squawk Field” on Thursday: “We nonetheless think it’s 50-50 … that the U.S. and China ultimately face off on trade … and technology.”

“The postponing of it doesn’t imply it’s an all-clear,” he added.

Emily Rodriguez

Emily Rodriguez

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