Pedestrians in front of an electronic stock board outside a securities firm in Tokyo, Japan, on Friday, 10 February 2023. Asian stocks were poised for a second weekly decline as worries about a more hawkish Federal Reserve weighed on sentiment. (Photo: Kiyoshi Ota/Bloomberg) 
News that Chinese state-owned lenders will reduce rates on the majority of the nation’s outstanding mortgages, as well as on deposits, boosted sentiment. Mainland China shares traded higher and the Hang Seng Index extended gains into a third day, with property stocks as the best performers.
“If we do see these reforms work, from a top-down perspective, it could actually really see sort of a floor for the markets,” Catherine Yeung, investment director at Fidelity International, said on Bloomberg Television.
Australian stocks outperformed the region after monthly inflation gauge eased more than expected, bolstering the case for the central bank to extend a pause in tightening at next week’s policy meeting.
US equity futures edged higher. American shares had climbed the most since June on Tuesday and bond yields retreated after job openings fell by more than expected, offering fresh evidence that labor demand is slowing in the world’s largest economy, taking pressure off the Fed. Separate data showed consumer confidence dropped amid souring views on jobs, higher borrowing costs and lingering inflation.
The US economic data triggered lower wagers in swap contracts for a Fed hike in 2023, and a greater chance of a policy pivot in the first half of 2024. Traders also brought forward bets on the expected start of rate cuts to June from July of next year.
Treasuries steadied, with the policy-sensitive two-year yield hovering at around 4.91% after sinking 15 basis points on Tuesday. Yields on government bonds in Australia and New Zealand fell on Wednesday.
“With markets ready to pounce on softer US data, any sign of weakness is likely to weigh further on yields and the US dollar,” said Matthew Simpson, a senior market analyst at City Index. “That could be great for equity market sentiment.”
Nearly 90% of the S&P 500 companies rose as the gauge closed just shy of 4,500. A rally in megacaps like Tesla Inc. and Nvidia Corp. sent the Nasdaq 100 up more than 2%.
A gauge of dollar strength rose and major currencies weakened against the greenback.
The crypto space changed course and erased earlier gains. Bitcoin had jumped more than 6% in the previous session as a US court ruling potentially paved the way for the country’s first Bitcoin exchange-traded fund.
In commodities, West Texas Intermediate rose for a fifth day, set to match the winning streak last seen in March, on signs of a tighter market. Gold steadied after rising to the highest since early August on easing Fed rate hike bets. DM