Stocks rise, bond yields drop on soft US PPI data – 14 Aug – [#2439]

Asia investors will digest the near certainty of a September loosening of U.S. monetary policy on Monday after a speech by U.S. Federal Reserve Chair Jerome Powell on Friday confirmed that the United States is ready to begin cutting interest rates.

At his keynote speech to the Kansas City Fed’s annual economic conference in Jackson Hole, Wyoming, Powell said “the time has come for policy to adjust,” given that upside risks to inflation have diminished and downside risks to employment have increased.

Powell’s comments lifted the yen <JPY=EBS> and weakened the dollar index <=USD>, with lower interest rates relative to Japanese rates making Japan’s currency more attractive.

Dollar/yen hit its lowest since August 6 in late Friday trading.

• China’s Sinopec posts 2.6% rise in first-half profit
• IMF sees scope for Bank of Japan to keep raising rates
• India approves assured pension scheme for federal government employees
• Wall Street ends sharply higher as Powell cements September rate cut hopes
• Bank of China President Liu Jin resigns

Key developments that could provide more direction to markets on Monday:

Singapore Manufacturing (July)

Japan Leading Indicator (Revised) (June)