HONG KONG - Asian markets were mixed yesterday as investors struggled to maintain early gains fanned by hopes the Federal Reserve’s interest rate hike campaign has run its course. 

A series of positive data out of Washington in recent weeks, particularly falling inflation, has been compounded by China’s recent promises of stimulus measures to kickstart growth, as the country’s post-Covid recovery grinds to a halt.

Traders are now keeping a
 close eye on earnings this week from tech titans Apple and Amazon, and US jobs at the end of the week that could provide an idea about the Fed’s
thinking.

Britain’s central bank is also due to announce a rate decision.

On Monday, Chicago Fed boss Austan Goolsbee left open the possibility of pausing or stopping interest rate hikes at the bank’s next policy meeting in September.

“Thus far we’re on the golden path and we’ve got to walk that line,” Goolsbee told Yahoo! Finance, referring to the path of lowering inflation without triggering a major recession.

He said the slowdown in inflation was “fabulous news”, echoing comments from Minneapolis chief Neel Kashkari, who called the readings “quite positive”.

“As we approach the middle of summer, there is a prevailing belief among people on the street that the Federal Reserve has probably made its final rate hike in the current cycle,” said Stephen Innes of SPI Asset Management.

“This is due to the evident decrease in inflation pressures.

“The current economic conditions, including decreasing inflation, a pause in Federal Reserve tightening, and steady or increasing growth, could create an ideal situation for the stock market.”

All three main indexes on Wall Street ended on a positive note, with the S&P 500 at a 16-month high. But while Asia started the day on the front foot, some markets lost momentum.

Tokyo, Sydney, Seoul, Taipei and Manila rose but Hong Kong and Shanghai were dragged by profit-taking following a run-up last week. 

- Nampa/AFP