Source: AFP
Asian markets fell on Monday as investors looked ahead to the release this week of key US inflation data that could guide the Federal Reserve’s interest rate plans for the new year.
With Wall Street seeing little action at the end of last week due to the Thanksgiving break, traders had few catalysts to drive action, although analysts were upbeat about the end of the year.
The fall in stocks comes after a recent rally in global markets fueled by bets that the US central bank is done lifting interest rates as inflation eases and the labor market falters.
The main focus this week is Thursday’s release of the personal consumption expenditures (PCE) price index, the Fed’s preferred gauge of inflation.
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“These numbers will be closely scrutinized for insights into inflation trends and their potential implications for monetary policy decisions,” said Stephen Innes of SPI Asset Management.
“While the current backdrop does not mean ‘mission accomplished’ when it comes to tackling inflation, policymakers must now focus on planning for the next phase of the economic battle.”
After a tepid half-day of business Friday in New York, Asia edged lower.
Hong Kong, Shanghai, Tokyo, Sydney, Singapore, Taipei and Wellington were all in the red.
Still, observers were upbeat about the outlook, with the latest weakness attributed to investors taking a breather after a strong month.
Tony Sycamore, at IG Group, said early December could see a selloff as investors “rebuild energy and set up year-end fireworks.”
Others said the fall in Wall Street’s VIX “fear index” — a measure of stock volatility — to its lowest point since January 2020 suggested investors were getting their mojo back.
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All eyes are also on developments in OPEC, after the group and its allies delayed a meeting aimed at agreeing production quotas, with some African countries said to be hiding Saudi Arabia’s calls for more cuts.
The group is believed to be close to reaching a deal that could see the Saudis and Russia extend output cuts into the new year.
Crude prices have fallen in recent weeks as demand appears to be slowing due to slowing economies, particularly China, and the crisis in the Middle East appears to be under control.
Keys around 02:30 GMT
Tokyo – Nikkei 225: Down 0.4 percent at 33,479.71 (break)
Hong Kong – Hang Seng Index: DOWN 0.9 percent at 17,404.45
Shanghai Composite: DOWN 0.7 percent at 3,019.35
Dollar/yen: DOWN at 149.26 from 149.56 yen on Thursday
EUR/USD: UP at $1.0941 from $1.0922
GBP/USD: UP at $1.2594 from $1.2585
Euro/pound: DOWN to 85.88 pence from 86.79 pence
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West Texas Intermediate: DOWN 0.5% to $75.17 a barrel
Brent North Sea crude: DOWN 0.5% at $80.12 a barrel
New York – DOW: UP 0.3 percent at 35,390.15 (close)
London – FTSE 100: Down 0.1 percent at 7,488.20 (close)
Source: AFP