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Asian stock markets : https://tmsnrt.rs/2zpUAr4

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Nikkei climbs as Takaichi nearer to PM job

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China economy set to slow, adding to case for more

stimulus

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Wall St futures edge up on hopes for solid earnings

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Bonds underpinned by expectations of multiple Fed cuts

By Wayne Cole

SYDNEY, Oct 20 (Reuters) - Asian share markets pushed

higher on Monday amid optimism on earnings as reporting season

gets into full swing, while a reading on U.S. inflation is

expected to be no more than a speed bump on the way to further

rate cuts.

Data on the Chinese economy are forecast to show growth

slowed to 4.8% in the third quarter, while retail sales and

industrial output should underline the need for stimulus as

policymakers convene to discuss the latest Five-Year Plan.

Figures out in the United States on Friday, and despite the

government shutdown, are expected to show core inflation held at

3.1% in September, but should not trouble markets given the

Federal Reserve has not pushed back against pricing for cuts.

"Chair Powell has highlighted the importance of signs of a

weakening job market in the Fed's policy considerations," said

Michael Feroli, head of U.S. economics at JPMorgan. "That

confirmed widely held expectations that the FOMC will cut rates

again at its next meeting in just over two weeks."

Futures are fully priced for a quarter-point easing this

month, and another in December, with rates seen reaching 3.0% by

the middle of next year.

Japan's Nikkei led Asia higher with a rise of 1.5%

encouraged by news the Liberal Democratic Party and the Japan

Innovation Party have agreed to form a coalition government,

setting the stage for the country's first female prime minister.

Analysts assume Sanae Takaichi would be pro-stimulus and

against further hikes in interest rates, a negative for the yen

and bonds but a plus for equities.

Shares in South Korea added 0.6%, while MSCI's

broadest index of Asia-Pacific shares outside Japan

firmed 0.1%.

For Wall Street, S&P 500 futures were steady, while

Nasdaq futures edged up 0.1% on expectations for upbeat

earnings this week.

HIGH EXPECTATIONS FOR EARNINGS

Reports include Tesla, Ford, GM,

Netflix ( NFLX ), Procter & Gamble ( PG ) and Coca-Cola,

along with aerospace and defence giant RTX and tech

stalwarts IBM ( IBM ) and Intel ( INTC ).

The UK also has major banks reporting this week while

software giant SAP will make a splash in Germany.

EUROSTOXX 50 futures edged up 0.4%, while DAX

futures firmed 0.5% and FTSE futures 0.1%.

S&P 500 companies overall are expected to have increased

earnings by 8.8% in the third quarter from a year earlier,

according to LSEG IBES, and strong results will be needed to

justify the market's lofty valuations.

The prospect of a series of Fed rate cuts has underpinned

bonds, with 10-year yields falling almost 14 basis

points last week to currently stand at 4.011%.

The slide in yields has pressured the dollar against

European and higher-yielding currencies, with the euro at

$1.1656 having edged up 0.3% last week despite a

surprise credit downgrade of France.

The yen had its own problems as investors have scaled back

pricing for a Bank of Japan rate hike this month to just 22%,

with a move in December put at 50-50.

The dollar was up 0.2% at 150.92 yen, while the

euro made similar gains to 175.89. The dollar index

was flat at 98.543.

In commodity markets, gold remained in high demand after

jumping almost 6% last week to as far as $4,378.69. The metal

was trading at $4,245 an ounce, with $4,200 now acting as

chart support.

"On a three-year horizon, we believe that there is more room

for gold prices to rise, eventually reaching a target of $5,000

an ounce in 2028 due to a structural change in demand for the

metal by investors and central banks," said Lorenzo Portelli,

head of cross-asset strategy at Amundi Investment Institute.

Oil prices continued to be weighed by ample supplies as

OPEC+ keeps raising its output.

Brent was flat at $61.28 a barrel, while U.S. crude

held at $57.57 per barrel.