Pedestrians cross an intersection in the Shibuya district of Tokyo, Japan, on Thursday, Nov. 14, 2024. A key gauge of the region’s equities rose 0.3%, aided by Samsung Electronics’ gains after South Korea’s biggest firm announced a surprise stock buyback plan. Shares in Hong Kong and mainland China also advanced in early trade on Monday, while Japanese benchmarks were down.
US futures edged higher, after the S&P 500 slid 1.3% on Friday to erase more than half of its gains following the US election.
The largely range-bound trade came on the heels of last week’s global selloff as the prospect of Donald Trump’s likely inflationary trade and tax policies, as well as Friday’s upbeat US retail sales data bolstered bets that the Fed may pause its easing cycle in 2025, with the odds of a rate cut next month now seen as less than a coin toss.
“Another Fed cut is still likely in December but it’s now a close call,” Shane Oliver, chief economist at AMP Ltd. in Sydney, wrote in a note to clients. “A slower pace of easing is likely next year, particularly given that Trump’s policies regarding tariffs and more tax cuts provide some upside threats to inflation on a one-to-three year view.”
An index of the dollar slipped, as did the yen. Bank of Japan Governor Kazuo Ueda said the timing of the central bank’s next policy adjustment will depend on the economy and prices, underscoring his data dependent stance and keeping his options open over when to next hike rates.
In corporate news, Alibaba is proposing to sell dollar and yuan bonds to pay back offshore debt and buy back shares, following the Chinese tech conglomerate’s issuance of a record convertible bond offering earlier this year.
As for commodities, oil held a weekly decline on concerns over plentiful supply and weaker demand from top crude importer China. Ukraine’s allies are pushing Volodymyr Zelensky to consider new ways to end the war with Russia as the US mulls a final decision to lift some restrictions of western-made weapons to strike limited military targets in Russia.
Gold advanced after suffering its worst weekly drop since 2021, as the dollar eased and traders weighed the outlook for Fed rate cuts.
Read More: Treasuries See 2024 Gains Dwindle With December Fed Cut at Risk
Elsewhere this week, China’s banks are expected to keep their loan prime rates unchanged after a cut in October. Bank Indonesia will deliver a policy decision as the rupiah neared 16,000 per dollar on Friday, a key psychological level for a central bank focused on currency stability.
Read More: Emerging Bonds Look Primed for Losses as Trump Tariff Fears Grow
UK and eurozone inflation readings are due which will help gauge the outlook for Bank of England and European Central Bank policy with a swath of officials from the respective institutions also due to speak. Nvidia’s results may test the sustainability of AI-led stock gains.