A gauge of global stocks traded near its record high Monday as the prospect of Federal Reserve interest rate cuts on the horizon stoked sentiment.
The MSCI All Country World index climbed for a second session, as benchmarks in Australia and Hong Kong gained.
The moves came as Chair Jerome Powell signaled in a Jackson Hole speech that the “time has come” to pivot to monetary easing. The Fed’s dovish tilt also lifted the yen against the dollar, as Asian-domiciled funds added to existing short positions on the greenback.
Japanese stocks declined due to the stronger local currency, while contracts for US and European equities slipped.
The positioning for lower US borrowing costs is rippling through financial markets, while the greenback is broadly falling and investors are piling into sovereign debt.
The yield on 10-year US Treasuries slipped two basis points to 3.78% on Monday. “It should be risk-on,” said Chamath De Silva, head of fixed income at Betashares Holdings in Sydney.
