Asian stocks pick up a bid ahead of Powell’s testimony

• Major Asian indices are trading flat-to-positive. 
• Focus is on Powell’s testimony and Fed minutes. 

Asian stocks are trading higher despite fears the US Federal Reserve President Jerome Powell may rein in expectations of aggressive rate cuts during his testimony to Congress later today. 

As of writing, Australia’s S&P/ASX 200 is up 32 points or 0.48% and South Korea’s Kospi is reporting a 12 point or 0.60% gain. 

Japan’s Nikkei and the Shanghai Composite index are flatlined while shares in Hong Kong are up 91 points or 0.31%. 

China’s consumer price index rose 2.7% year-on-year in June, as expected. The producer price index, however, came in at 0.0%, missing the expected rise of 0.3% by a big margin. 

Fed’s Powell is scheduled to testify in front of the House Financial Services committee on Wednesday.

A better-than-expected jobs report released on Friday dampened expectations of aggressive easing by the US Fed. This is evident from the greenback’s broad-based rally. The Dollar Index, which tracks the value of the greenback against majors, has risen by nearly 100 pips in the last three trading days. 

Stocks will likely come under pressure tomorrow if both Fed’s Powell and the minutes of the June policy meeting force markets to scale back expectations of rate cut later this month.