The American session is coming to an end and the indexes are about to record one of their best daily presentations for weeks. The strong rebound in stock prices followed Powell's comments that the thought of interest rate cuts is not distant for the Federal Reserve.
Given the continuing trade war with China, the trade war in lull with Europe and Japan, and the current escalating trade war with Mexico, it seems that the suspicion that the US economy will withstand the world's opposite winds is being snatched. In order to protect the US economy, it is quite possible for the Fed to reduce interest rates at the end of this year, and more than once.
What can we expect for the Asian session? Growths and markets green, but not for some spectacular market optimism that things get better. From a purely economic point of view, loosening policy leads to a rise in stocks. Something that can follow in Asia as well. Japan is no longer in place with almost no indication of inflation, but China could also reduce interest rates.
BofA Merrill Lynch expects China to cut interest rates twice this year and once in 2020 to keep pace with the US.
Given the expectations for growth in the upcoming Asian trading session, we expect a weak yen and depressed gold given the risk-on sentiment. Later, we expect Australia's GDP and Caixin PMI in the service sector for China. Expectations are the indicator to report a decrease.
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