(Bloomberg) — Most Asian stocks will fall early Monday as traders manage expectations of Federal Reserve easing and come to terms with the cost of the president’s proposed fiscal and trade policies. elected Donald Trump.
Bloomberg’s Most Read
Australian shares fell while share futures in Japan and mainland China pointed to losses. Contracts in Hong Kong rose. US futures were steady after the S&P 500 fell 1.3% on Friday to erase more than half of its gains following the US election.
A soft start risks extending last week’s global selloff as investors weigh the prospect that Trump’s tariffs and tax cuts could reignite inflation in an already strong U.S. economy. Views are emerging that the Federal Reserve could pause its easing cycle in 2025, and the odds of a rate cut next month are now seen as less than a coin toss.
“Another Fed cut in December is still likely, but it is now close,” Shane Oliver, chief economist at AMP Ltd. in Sydney, wrote in a note to clients. “A slower pace of easing is likely next year, especially given that Trump’s policies on tariffs and further tax cuts pose some upside threats to inflation over a one- to three-year outlook. “.
The dollar was steady against its major peers in early trading after rising 1.4% last week, a seventh consecutive weekly gain, as Treasury yields rose on reduced expectations about the Federal Reserve policy. The measures, coupled with concerns about Chinese growth, have devastated everything from the Australian dollar to emerging market bonds. Asian stocks fell 3.9% last week, their worst sell-off in about six months.
In commodities, oil fell while gold rose. Ukraine’s allies are pressing Volodymyr Zelenskiy to consider new ways to end the war with Russia as the United States mulls a final decision to lift some restrictions on Western-made weapons to attack limited military targets in Russia.
In Asia on Monday, traders will be watching Bank of Japan Governor Kazuo Ueda’s speech and press conference for clues on the central bank’s next policy move after officials expressed concern about the rapid weakening of the yen. Markets are pricing in about 14 basis points of rate hikes in December, according to swaps data compiled by Bloomberg, ahead of this week’s inflation data.
“Ueda’s press conference should be the main focus this week in assessing the timing of the BOJ’s next rate hike,” Barclays strategists led by Themistoklis Fiotakis wrote in a note to clients. “USD/JPY could remain under upward pressure in the near term due to Trump and yen carry trades, but will likely rise more slowly as it approaches 160 on concerns about currency intervention and positioning for currency increases. faster rates.
For the rest of this week, Chinese banks are expected to keep their prime lending rates unchanged after a cut in October. Bank Indonesia will make a policy decision when the rupiah approaches 16,000 per dollar on Friday, a key psychological level for a central bank focused on monetary stability.
UK and eurozone inflation readings will be published, helping to assess the outlook for Bank of England and European Central Bank policy, with a range of officials from the respective central banks also speaking. Nvidia’s results may test the sustainability of AI-powered stock gains.
While expectations for a bumper number appear low, “options traders see a higher risk of the share price rising following the earnings release,” said Chris Weston, head of research at Pepperstone Group in Melbourne. “Guidance from hyperscale companies suggests that demand for GPUs is incredibly strong, so you can understand why options traders are positioned for near-term gains.”
This week’s key events:
Bank of Japan Governor Kazuo Ueda speaks Monday
Group of 20 summit begins Monday in Brazil
European Union foreign ministers meet in Brussels on Monday
Minutes from Tuesday’s RBA meeting
Eurozone CPI, Tuesday
Canada CPI, Tuesday
China’s prime lending rates, Wednesday
Indonesia Rate Decision Wednesday
South Africa Retail Sales, CPI, Wednesday
UK CPI, Wednesday
Nvidia earnings, Wednesday
ECB President Christine Lagarde and Vice President Luis De Guindos speak on Wednesday
The ECB publishes a financial stability review on Wednesday
Federal Reserve Governor Lisa Cook and Federal Reserve Governor Michelle Bowman speak on Wednesday
BOE Lieutenant Governor Dave Ramsden Speaks Wednesday
RBA Governor Michele Bullock speaks on Thursday
Japan CPI, Friday
HSBC Manufacturing and Services PMI in India, Friday
Eurozone HCOB manufacturing and services PMI, Friday
UK Retail Sales, S&P Global Manufacturing and Services PMI, Friday
US University of Michigan Consumer Confidence, S&P Global Manufacturing and Services PMI, Friday
Some of the main movements in the markets:
Stocks
S&P 500 futures were little changed at 8:14 a.m. Tokyo time.
Hang Seng futures up 0.2%
Australia’s S&P/ASX 200 fell 0.4%
Nikkei 225 futures fell 1.6%
Coins
The euro was little changed at $1.0536
The Japanese yen fell 0.2% to 154.57 per dollar
The offshore yuan was little changed at 7.2425 per dollar.
The Australian dollar was unchanged at $0.6462.
Cryptocurrencies
Bitcoin rose 0.3% to $89,398.76
Ether fell 0.3% to $3,054.78.
Captivity
Raw materials
West Texas Intermediate crude fell 0.4% to $66.77 a barrel
Spot gold rose 0.3% to $2,569.73 an ounce.
This story was produced with the help of Bloomberg Automation.
