SYDNEY: Asian shares took a breather from their recent rally on Thursday as investors searched for fresh catalysts, while the yen came under heavy selling pressure, particularly against the euro and Swiss franc.
Oil prices slipped, after surging over 2% overnight to seven-week peaks as a surprise drop in US crude inventories added to supply worries amid export issues in Iraq, Venezuela and Russia.
European stocks are set for a subdued open, with EUROSTOXX 50 futures off 0.1%. S&P 500 futures and Nasdaq futures were flat ahead of a lineup of Federal Reserve officials, whose remarks will be closely watched for their views on interest rates.
San Francisco Fed President Mary Daly said further rate cuts will likely be needed but the timing remained unclear. Earlier in the week, Fed Chair Jerome Powell had struck a cautious tone about further rate cuts, after the central bank delivered the first easing this year just last week.
MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.1%, having rallied over 5% for the month and 9% for the quarter. Japan's Nikkei rose 0.2%, after jumping 7% for the month and 13% for the quarter.
"It must be said that fresh catalysts were lacking across the board, with little by way of impactful news or data-flow to move the needle especially much," said Michael Brown, a senior research strategist at Pepperstone.
Chinese shares outperformed, with blue chips 0.7% higher and Hong Kong's Hang Seng advanced 0.2%. Chinese tech shares are up for the eighth straight week, the longest winning streak on record on AI optimism.
Overnight, Wall Street closed lower for a second straight session as investors booked profits. Futures still imply a 92% chance for a rate cut from the Fed in October, but the total expected easing has faded to 100 bps from 125 bps.
Next up, the spotlight will be on US economic data, including the Fed's preferred inflation gauge, the PCE report on Friday and the final Q2 GDP estimate on Thursday.
The benchmark US 10-year Treasury yield was flat at 4.1408%, having risen 3 basis points overnight. The Treasury will auction $44 billion in seven-year notes on Thursday.
The dollar index held overnight gains at 97.82. Yen weakness spread to crosses, with the Swiss franc hitting a record high on the yen and the euro at a one-year peak at 174.66.
Spot gold was flat at $3,739 an ounce. US crude slipped 0.4% to $64.73 a barrel, while Brent fell 0.3% to $69.11. — Reuters
Oman Observer is now on the WhatsApp channel. Click here
