Stocks rose in Asia overnight, focus now on UK budget and Powell Speech

After a previous lack of stimulus measures disappointed some investors, Asian equities climbed on Wednesday as traders looked to Beijing for policy indications during its week-long annual session of parliament. Meanwhile, gold and bitcoin dropped after reaching record heights.

Prior to Federal Reserve Chair Jerome Powell's congressional testimony, which begins later on Wednesday and will be analysed to determine whether and when the American central bank is prepared to begin lowering interest rates, traders were likewise reluctant to make significant wagers.

A day after Beijing announced a highly anticipated 5% growth target for 2024 during a crucial parliament meeting devoid of any stimulus measures, Chinese markets were neutral.

Tuesday saw a more than 1% decline in Wall Street's three main indexes, with the tech-heavy Nasdaq suffering most from weakness in megacap growth firms like Apple and the semiconductor industry.

The opening of European markets this morning has seen a small increase. The government's budget, which will be a major event for investors in Britain, will include Finance Minister Jeremy Hunt doing his hardest to reduce taxes without angering bond markets.

The focus is now squarely on payroll data that is coming later this week since data released on Tuesday in the U.S. revealed a fading expansion of the services sector and a steeper-than-forecast decline in new factory orders.

In order to predict when the Fed will begin reducing rates, traders are analysing statements made by policymakers and U.S. economic statistics. It is priced in by the markets at a 68% possibility that the Fed will begin its easing cycle in June.

Powell's scheduled congressional hearings beginning on Wednesday are therefore noteworthy, even if experts anticipate the Fed head to remain true to his position.

Over in the eurozone, it is largely anticipated that the ECB will maintain interest rates at a record 4%. Traders will be looking for indicators of when rates may begin to decline in response to persistent inflation.

The case for the ECB to retain rates at record highs for a little while longer before beginning to soften policy towards the middle of the year is strengthened by data released last week that revealed euro zone inflation declined in February but underlying price rise remained strong.

This year, the markets are factoring in 90 basis points of cuts from the ECB.

(Sources: investing.com, reuters.com)