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

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Markets cautious as much rides on Nvidia ( NVDA ) earnings

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NZ central bank surprises with hawkish outlook

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Currencies await UK inflation data, Fed minutes

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Oil slips again, gold holds near record high

By Wayne Cole

SYDNEY, May 22 (Reuters) - Asian shares edged higher on

Wednesday as anxious investors dared to hope AI-diva Nvidia ( NVDA )

could meet sky-high expectations, while keeping a wary eye on

the outlook for U.S. and UK interest rates.

New Zealand's central bank offered a sobering assessment of

its inflation problems, warning that rates would have to be

higher for longer to bring them to heel in a shock to local

markets.

That saw the kiwi dollar jump 0.9% to a one-month high of

$0.6151 as bond yields spiked.

MSCI's broadest index of Asia-Pacific shares outside Japan

firmed 0.4%, having already climbed for four

straight weeks to reach a two-year top.

Japan's Nikkei eased 0.6% as data showed a weak yen

was boosting exports but also stoking imported inflation and

weighing on business sentiment.

EUROSTOXX 50 futures and FTSE futures both

inched up 0.2%. S&P 500 futures and Nasdaq futures

were both a fraction firmer.

Markets are braced for fireworks when Nvidia ( NVDA )

reports after the bell, with options priced for a swing of 8.7%

in either direction, worth $200 billion in market value.

Analysts wonder how much more it can deliver given that the

chip-maker already boasts a profit margin of 77%, and its stock

is up 93% on the year so far.

"Sentiment is quite positive, with our bars well-above

consensus and a sense that management has left some in the tank

to surprise positively," said JPMorgan analyst Josh Meyers.

"This suggests that it may take a big upside surprise, on

earnings or clearer forward guidance, to get the stock moving

any higher."

CENTRAL BANK WATCH

Minutes of the U.S. Federal Reserve's last meeting due later

in the day should confirm the next move is still likely down,

but policy makers first need more confidence that inflation has

resumed its downtrend.

Fed fund futures imply about a 66% chance of a rate

cut by September and have 43 basis points of easing priced in

for this year.

Figures on UK inflation due later in the session could

decide whether the Bank of England eases as early as June, or

waits to August.

Forecasts are for core consumer price inflation to slow to

3.6% in April, from 4.2% in March, and anything lower would

narrow the odds on a June cut and likely pressure sterling.

The pound was holding just short of two-month highs at

$1.2712, while the euro was trading steady at $1.0857

, just off its recent top of $1.0895.

The dollar flatlined on the yen at 156.20 as the

threat of Japanese intervention stalled its advance.

Gold held firm at $2,424 an ounce, after touching a

record high of $2,449.89 early in the week.

Oil prices slipped amid concerns over the peak U.S. driving

season, given that demand was seasonally tracking at its lowest

since 2020 and retail prices had fallen for four weeks in a row.

Brent crude fell 50 cents to $82.38 a barrel, and

the spread over futures narrowed further, while U.S. crude

lost 54 cents to $78.12 per barrel.