Asian equities might see positive momentum as global markets continued their ascent following the release of weaker-than-expected U.S. Nonfarm Payroll data on Friday, fuelling optimism for potential Federal Reserve rate cuts later this year. It’s worth monitoring small-cap stocks, which are particularly sensitive to interest rates and may drive price action due to heightened demand for long-duration assets.
Technical conditions have also improved, supporting the upward movement of risk assets, underscored by lower implied volatility and the revival of share buybacks. With no significant economic data releases scheduled this week, sentiment remains cautiously optimistic. The U.S. dollar initially weakened but eventually stabilized, remaining volatile alongside the U.S. Treasury yields.
