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By Wayne Cole
SYDNEY (Reuters) – Asian stocks rallied on Wednesday as rising Treasury yields pushed the dollar higher as investors waited impatiently to see whether the world 's most powerful central banker would confirm or confuse the expectations of investors. American easing this month.
The MSCI's largest share of Asia Pacific ex-Japan () shares rose 0.4%, after three sessions of losses.
South Korea () edged up 0.4%, but Japan's Nikkei () lagged with a loss of 0.1%. The E-Mini futures for the S & P 500 () remained unchanged, while the EUROSTOXX () and FTSE () futures contracts showed small opening gains in Europe.
Chinese stocks () barely budged as data showed that inflation remained stubbornly under control despite a surge in pork prices.
Worrying global inflation is one of the reasons investors are relying on dubious Federal Reserve Chairman Jerome Powell when he testifies before Congress on Wednesday.
Futures prices are still fully taken into account for a 25-basis-point cut at the July 30-31 Fed meeting, but they have abandoned bets on a half-point change. They had implied a 25% chance of aggressive reduction before the report on Friday's optimistic jobs.
"We still think the odds favor a 25bp cut in insurance," said Kevin Cummins, an American economist at NatWest Markets.
"The rate cuts the Fed is considering are not just about growth, but about inflation, which remains well below the target and inflation expectations, which are collapsing before the Fed." announces the likelihood of reductions. "
During the night, Raphael Bostic, chairman of the Fed Atlanta Fed, did not let go in saying that the central bank was debating the risks and benefits of allowing the US economy to "warm up a little more".
US and Chinese trade officials held "constructive" talks on the phone trade on Tuesday, said White House economic adviser Larry Kudlow.
Wall Street was cautious on Tuesday as the Dow () ended down 0.08%, while the S & P 500 () added 0.12% and the Nasdaq () 0.54%.
A LITTLE YIELD
The slowdown in the US rate hike meant that bonds lost some of their huge recovery as yields on two-year Treasury bonds dropped from 1.696% to 1.917%.
This allowed the dollar to rebound on a basket of currencies at 97,500 () against 95,843 (low).
The dollar also strengthened to 108.90 yen, while the euro fell to 1.1206 dollar () after reaching 1.11412 dollar a few weeks ago.
The Mexican peso suffered some bruises after slipping on Tuesday when moderate Finance Minister Carlos Urzua resigned suddenly, citing "extremism" in economic policy.
The Canadian dollar was on the defensive before the Bank of Canada raised interest rates in the event that policymakers tried to slow down the recent rally.
Dollar gains detracted from gold 's shine, which fell 0.3% to $ 1,393.68 per ounce.
Oil prices were buoyed by tensions in the Middle East and the announcement of the fall in US stocks for the fourth week in a row, easing fears of oversupply.
Futures contracts on Brent () advanced 64 cents to $ 64.80, while US crude () rose 82 cents to $ 58.65 per barrel.
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