Hopes for bumper tech earnings underpin equity gains
Bond bulls see rate cuts in US, Canada and a hold in Japan
Gold hits $4,000/oz as hot money leaves the bubble
SYDNEY, Oct 28 (Reuters) – Asian shares consolidated recent hefty gains on Tuesday as hopes for a thawing in global trade tensions kept risk appetites keen, while the bull run in tech stocks counted on a bumper round of mega-cap earnings this week.
The likelihood of lower borrowing costs in the U.S. and Canada this week supported bonds, and weighed on the dollar as investors waited to see just how dovish the Federal Reserve might be on the outlook.
Meanwhile, safe-haven gold huddled around $4,000 an ounce as a drop of 9% in five sessions squeezed leveraged money out of what were very crowded trades.
“What began as a price rise supported by fundamentals now looks driven by retail enthusiasm,” said Neil Shearing, group chief economist at Capital Economics.
“And with prices still at record highs in real terms, the next big move in gold is more likely to be down than up,” he added. “Indeed, our new forecast is that the price will fall to $3,500/oz by the end of 2026.”
Several Asian share markets have also hit all-time highs and were overdue a breather. The Nikkei (.N225), opens new tab eased 0.2%, having surged 2.5% on Monday as a rally in all things tech lifted it to gains of almost 27% so far this year.
South Korean stocks (.KS11), opens new tab slipped 1.2%, giving back just some of Monday’s 2.6% jump. Sentiment was aided by data showing the economy outpaced forecasts in the third quarter, led by strength in consumption and exports.
EUROSTOXX 50 futures lost 0.2%, as did DAX futures , while FTSE futures were a fraction lower. S&P 500 futures and Nasdaq futures were little changed near all-time peaks.
Aiming to curb expenses, Amazon is planning to cut as many as 30,000 corporate jobs starting on Tuesday, sources told Reuters.
In bond markets, 10-year Treasury yields held at 3.98% as investors wait on Wednesday’s Fed meeting. A quarter-point rate cut is considered a done deal, with the real focus on whether the Fed validates market pricing for a December easing as well.
There are also hopes the Fed will end the rundown of its balance sheet, otherwise known as quantitative tightening.
The BOJ is likely to debate whether conditions are right to resume rate hikes as worries about a tariff-induced recession ease, but political complications may keep it on hold for now.
Wagers on a dovish Fed outlook saw the dollar slip 0.4% to 152.20 yen , having stopped short of the recent 153.29 peak overnight.
The euro nudged up to $1.1660 , but remains short of resistance at $1.1728. The dollar index eased 0.3% to 98.643 , but remained well within the recent trading range.
In commodity markets, oil prices eased on a Reuters report that eight OPEC+ nations are leaning towards making another modest increase in oil output for December when they meet on Sunday, as Saudi Arabia pushes to reclaim market share.
Brent dropped 0.2% to $65.51 a barrel, while U.S. crude eased 0.2% to $61.20 per barrel.
