Source: AFP
Asian markets pressed ahead with their rally on Friday as another round of US data further fueled expectations that the Federal Reserve will cut interest rates more than it has indicated next year.
Stocks have been on an upward trajectory in recent weeks as a slew of data show inflation is easing and the labor market is softening, while the economy is easing but appears safe from recession.
The gains eased midweek as traders took a breather, with analysts saying the advance may have gone a little too fast, but they got back on track on Friday after a strong rally on Wall Street.
This came as data showed the US economy grew slightly less than initially thought in the third quarter.
The readings were “consistent with the narrative that a cooling economy will keep the Fed on a rate-cutting path in the not-too-distant future,” Morgan Stanley’s Chris Larkin told E*Trade.
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![](https://images.yen.com.gh/images/553ccf962abc558a.jpg?impolicy=cropped-image&imwidth=256)
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“That sentiment played a big role in the recent market rally.”
The focus is now on the release of the personal consumption expenditures (PCE) price index, preferred by policymakers for inflation, which could be key to next month’s Fed meeting.
Bank officials sent markets reeling last week when they kept interest rates on hold and released their rate forecast suggesting they would cut several times next year, but observers said investors were confident there was more to come.
Traders are betting on about 150 basis points of declines, according to Bloomberg News, twice what policymakers have indicated.
All three major indexes on Wall Street rose on Thursday, with the Nasdaq and S&P 500 piling up more than one percent, and analysts said the fact that trading was still lifting stocks when they were overbought was a good sign for the market prospects.
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![](https://images.yen.com.gh/images/71ef7de979065eb1.jpg?impolicy=cropped-image&imwidth=256)
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Asia built on the US lead as investors in most cities retreat for the Christmas holiday.
Tokyo, Hong Kong, Sydney, Seoul, Singapore, Seoul, Wellington, Taipei, Manila and Jakarta all did well, although Shanghai dipped.
The dollar rose marginally after falling against its major peers on Thursday in reaction to the latest data.
“If recent trends hold, stocks are poised for an upward trajectory in the typical ‘Santa Claus Rally,'” said Stephen Innes of SPI Asset Management.
“However, given the substantial gains already in place, investors may find themselves content with an early stuffed Santa’s stocking rather than risking the proverbial piece of coal if US PCE data is hotter than expected.”
Keys around 02:30 GMT
Tokyo – Nikkei 225: UP 0.2 percent at 33,204.89 (break)
Hong Kong – Hang Seng Index: UP 0.5 percent at 16,702.18
Shanghai Composite: DOWN 0.2 percent at 2,913.79
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![](https://images.yen.com.gh/images/58d5cc5110284f36.jpg?impolicy=cropped-image&imwidth=256)
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Dollar/yen: UP to 142.46 yen from 142.14 yen on Thursday
EUR/USD: DOWN to $1.1000 from $1.1013
GBP/USD: DOWN to $1.2685 from $1.2690
Euro/pound: DOWN to 86.70p from 86.76p
West Texas Intermediate: UP 0.7% to $74.41 a barrel
Brent North Sea crude: UP 0.7 percent at $79.93 a barrel
New York – Dow: UP 0.9 percent at 37,404.35 (close)
London – FTSE 100: Down 0.3% to 7,694.73 (close)
Source: AFP