Asian stocks drift, companies dollar ahead of central bank meetings By Reuters

Written by Ankur Banerjee

SINGAPORE (Reuters) – Asian stocks rose and the dollar firmed on Tuesday as traders awaited a series of central bank meetings this week that are likely to see the U.S. Federal Reserve cut interest rates and the Bank of Japan remain unchanged for now. .

The most famous and largest cryptocurrency remained close to the record high of $107,821 it reached on Monday. It was finally flat at $106,041.

The cryptocurrency market has been on a tear since the US elections in early November as traders bet that the incoming Trump administration will usher in a friendlier regulatory environment. Bitcoin will rise by 150% in 2024.

In the stock markets, the Australian market rose 0.75%, rising 0.26%, and technology-heavy Taiwanese stocks rose 0.5%.

That sent MSCI’s broadest index of Asia-Pacific shares outside Japan up 0.18%. The index is on track to achieve gains of 10% for this year, its strongest annual performance since 2020.

Data on Monday showed that Chinese consumption slowed more than expected in November, sending stocks lower. On Tuesday, Hong Kong’s index fell 0.4%, while mainland stocks fell 0.13% in early trading.

Tony Sycamore, a market analyst at IG, said the dire housing numbers provide further evidence that Beijing’s attempts to stem the downturn in the real estate sector have yet to take hold.

“More stimulus measures are urgently needed,” said Tony Sycamore, market analyst at IG, noting that the housing market remains fragile despite recent political support.

“However, these measures are unlikely to be implemented until after details of the US tariffs on China are revealed early next year,” Sycamore said.

Central banks in the US, Japan, UK, Sweden, Norway, Indonesia and Thailand meet this week, with the Bank of Japan, Bank of England, Norges Bank and Bank of Thailand expected to remain steady, while the Riksbank is expected to cut interest rates. .

On the other hand, Bank Indonesia is expected to raise interest rates to support the rupiah, which is near its lowest levels in four months.

The spotlight will be on the Fed and especially on the outlook for next year with markets expecting a 25 basis point cut on Wednesday.

After Wednesday’s cut, markets see a roughly 37% chance of either one 25 basis point cut or none at all during all of 2025, according to the CME FedWatch tool, up from about 21% the week before.

Charu Chanana, chief investment strategist at Saxo Bank, said the market would be watching for any signs of a “hardening cut.”

“This means that as the Fed eases policy, it could signal caution about the pace of future cuts, either through the committee’s updated dot chart or through Chairman Powell’s press conference.”

The previous bullet chart indicated four interest rate cuts (100 basis points) for 2025, but this could be revised to just three cuts or even two as inflation risks remain high, Chanana said.

The index, which measures the greenback against six rival currencies, settled at 106.77 and is on track for a 5% gain for the year.

The yen last recorded 154.085 to the dollar and remained in a defensive position amid slim chances of raising interest rates from the Bank of Japan this week, with the majority of economists polled by Reuters expecting the central bank to maintain interest rates.

In other currencies, the euro reached $1.05207, heading towards a decline of about 5% in 2024. The British pound stabilized at $1.2689. (FRX/)

In commodities, oil prices were little changed as investors worried about Chinese demand ahead of the Fed meeting. (or)

US West Texas Intermediate crude fell 0.23 percent to $70.55 per barrel, while futures contracts fell 0.15 percent to $73.82 per barrel.

It rose to $2,656.71 per ounce, on track for a 29% rise in 2024, its strongest year since 2010.