Source: AFP
Asian markets were mixed on Tuesday after a tepid performance on Wall Street, with hopes for a rate cut by the Federal Reserve next year and investors awaiting key U.S. inflation data due later this week.
A series of indicators in recent months pointing to a slowing economy — as well as lower-than-expected increases in consumer prices — have fueled optimism that the U.S. central bank will raise borrowing costs for the last time this cycle.
This has led to speculation that policymakers have managed to walk the fine line between reducing inflation and preventing a recession.
However, analysts said there was a streak of concern that the readings could indicate weakness in the line.
In addition to the personal consumption expenditures (PCE) price index, the Fed’s preferred guide to inflation, investors will be watching several other indicators this week, including consumer confidence and gross domestic product.
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A number of central bank officials are also lined up to speak, including boss Jerome Powell, although they are expected to stick to their long-standing line that their policy decisions will be data-driven and see interest rates staying higher for longer to tame inflation completely.
“The market appears to have embraced the idea that slowing economic data will speed the arrival of market-friendly rate cuts, even as the Fed continued to telegraph otherwise,” Morgan Stanley’s Chris Larkin told E*Trade.
“This week will provide plenty of opportunities for traders to decide whether this cooling trend is intact.”
The data shows investors see nearly a percentage point cut through next year, with US Treasury yields continuing to slide from 16-year highs last month.
In morning trade Hong Kong, Tokyo and Singapore were in the red, while Shanghai was flat.
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Rose Sydney, Seoul, Wellington, Taipei, Manila and Jakarta.
Expectations that interest rates will be cut weighed on the dollar, which extended Monday’s losses against the yen and pound.
Traders are also watching developments in oil markets as OPEC and its key allies prepare for a meeting that has been delayed until Nov. 30 after some African countries reportedly balked at more output cuts proposed by Saudi Arabia.
The Saudis and Russia are believed to be considering announcing further output cuts in the new year as they try to prop up prices, which have fallen due to slowing economies and softening demand.
Keys around 02:30 GMT
Tokyo – Nikkei 225: Down 0.2 percent at 33,370.40 (break)
Hong Kong – Hang Seng Index: DOWN 0.2 percent at 17,485.79
Shanghai – Composite: FLAT at 3,031.86
Dollar/yen: DOWN at 148.26 from 148.64 yen on Monday
EUR/USD: DOWN to $1.0954 from $1.0958
![](https://images.yen.com.gh/images/77e90901c2c648de.jpg?impolicy=cropped-image&imwidth=256)
![](https://images.yen.com.gh/images/77e90901c2c648de.jpg?impolicy=cropped-image&imwidth=256)
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GBP/USD: UP at $1.2632 from $1.2627
Euro/pound: DOWN to 86.72 pence from 86.75 pence
West Texas Intermediate: UP 0.6% to $75.29 a barrel
Brent North Sea crude: UP 0.6% at $80.42 a barrel
New York – DOW: Down 0.2 percent at 35,333.47 (close)
London – FTSE 100: Down 0.4% to 7,460.70 (close)
Source: AFP