Pedestrians pass an electronic bulletin board displaying the Nikkei Stock Average outside a securities company in Tokyo on October 31, 2023.Reuters/Kim Kyung-hoon Obtaining license rights
SINGAPORE, Nov 28 (Reuters) – Asian stocks rose on Tuesday as investors remained confident the U.S. Federal Reserve has ended its interest rate hike cycle and is looking ahead to a key inflation report later this week. While the dollar rose slightly to a three-month low, the dollar fell to a three-month low. .
MSCI’s broadest index of Asia-Pacific stocks outside Japan (.MIAPJ0000PUS) rose 0.29% and is on track to rise nearly 7% in November, its strongest monthly performance since January.
However, European stock markets traded lacklusterly, with Eurostoxx 50 futures down 0.11%, Germany’s DAX futures down 0.18% and FTSE futures down 0.09%. US stock futures were little changed.
Investors this week will focus on the Fed’s recommended inflation indicators and euro zone consumer inflation data on Thursday for further clarity on the direction of prices and monetary policy.
Vasu Menon, managing director of investment strategy at OCBC Bank in Singapore, said markets would feel more comfortable expecting the Fed to pause if statistics showed that inflation was cooling further.
“But I think it’s not just this week’s inflation numbers that will be very important, but also December’s payroll numbers.”
According to CME’s FedWatch tool, markets are pricing in a 95% chance that the U.S. central bank will keep interest rates unchanged next month, with the possibility of a rate cut starting to increase in mid-2024.
“We think the Fed will probably start cutting rates once inflation gets below 3%, and we expect that to happen in the middle of next year,” Menon said.
But officials at major central banks are trying to put a lid on expectations that a rate cut is imminent, saying they need to keep rates high for some time to beat inflation.
“Monetary policy will need to be restrictive for an extended period of time,” Bank of England Deputy Governor Dave Lumsden said at a news conference in Hong Kong.
European Central Bank President Christine Lagarde said on Monday that the central bank’s fight to rein in price rises was far from over, citing persistently high wage growth and an uncertain outlook despite easing inflationary pressures in the euro zone. He said he had not.
Federal Reserve Chairman Jerome Powell is also scheduled to speak on Friday, and traders will be scrutinizing his words to see where interest rates are headed.
China’s blue-chip CSI300 index (.CSI300) fell 0.17% and Hong Kong’s Hang Seng Index (.HSI) fell 1%, a day after data showed that China’s industrial company profit growth slowed in October. .
Japan’s Nikkei Stock Average (.N225) fell 0.12%, but is up 8% this month and is on course for its strongest monthly performance in three years.
U.S. data on Monday showed new single-family home sales fell more than expected in October as rising mortgage rates reduced affordability, but the housing sector remained buoyed by a persistent shortage of existing properties on the market. It is being
Weaker-than-expected economic data weighed on U.S. Treasury yields, with the benchmark 10-year Treasury yield falling 9.6 basis points on Monday. In Asian time, the index rose 0.8 basis points to 4.396%.
The dollar index, which measures the dollar against a basket of currencies, fell to 103.07, its lowest since Aug. 31. The index is down 3%, on track for its biggest monthly decline in a year.
The Japanese yen rose 0.27% to $148.27, while the euro fell 0.05% to $1.0948.
The Australian dollar rose 0.19% to US$0.6619, having previously hit a four-month high of US$0.6632. The NZ dollar opened at a seven-week high of US$0.6114 and last traded at US$0.60985.
Data shows Australia’s retail sales unexpectedly fell in October as consumers cut back on everything but food, but many analysts believe this month’s Black Friday They think they are simply saving money to splurge on sales.
US crude oil fell 0.13% to $74.76 per barrel, and Brent crude fell below $80, with oil prices swinging between rising and falling ahead of the OPEC+ meeting later this week.
Spot gold rose 0.1% to $2,015.00 an ounce after hitting a six-month high of $2,017.89 in early trading.
Report by Ankur Banerjee.Editing: Sam Holmes and Kim Coghill
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