SINGAPORE, Dec. 14 (BNA): Asian stocks rose, bonds were strong, and the dollar lost ground after data showed US consumer prices barely rose in November, raising hopes that inflation has peaked and interest rate increases will slow and eventually halt in the year. 2023.
However, nervousness over policymakers’ next moves kept the mood in check ahead of the Federal Reserve’s meeting later in the day and central bank meetings in Britain and Europe on Thursday. Reuters reports that investors are also vigilant over the global economy, despite China’s reopening from tightening COVID restrictions.
The US consumer price index rose 0.1% last month, 0.2 percentage points slower than economists expected, and in the 12 months through November, the core CPI rose 7.1% – its slowest pace in nearly a year.
European markets were poised for a higher open with across the region Euro Stoxx 50 futures rising 0.15%, German DAX futures flat and FTSE futures rising 0.05%. Meanwhile, US stock futures and the S&P 500 e-minis advanced 0.35%.
In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1%. The index is up 1.2% so far this month.
Japan’s Nikkei rose 0.78% while Australian shares advanced 0.67%.
Stocks also jumped in China and Hong Kong on Wednesday as the easing of COVID-19 restrictions and a refocus on economic growth boosted sentiment.
The Chinese CSI 300 Super Index rose 0.3% while the Hang Seng Index gained 0.89%.
“If CPI stops and China fully reopens, it’s still not really enough to get Asia markets going, because we’re facing a scenario where the more developed markets, the major markets face a recessionary environment in 2023,” said Sat Dohra, portfolio manager at Janus. Henderson Investors Asia formerly Team Japan Equities.
“There will be some upside from reopening China, but I think it’s not enough to offset the negatives.”
Wall Street rallied overnight before paring gains to leave the S&P 500 up 0.7% at the close. The index rose about 2.8% at one point, while the Nasdaq rose as much as 3.8% before closing 1% higher.
The dollar fell from 20-year highs as US interest rate expectations fell broadly and sharply, while bonds rose.
The yield on the benchmark 10-year US Treasury fell 11 basis points overnight and settled at 3.4956% in Asian afternoon trade. The two-year yield, which tracks short-term interest rate expectations, touched 4.2053% compared to the US closing of 4.229%.
The US dollar fell 1.5 percent against the yen after inflation data and settled at 135.37 yen in Asia. The US dollar index, which measures the greenback against a basket of other major trading partners’ currencies, fell to a six-month low of 103.57 before settling at 104.04. It’s down more than 9% from a two-decade high in September.
SM