Global Markets React to US Inflation Data
Asian Shares Rise Amid Rate Cut Hopes
Asian shares surged on Thursday, buoyed by US inflation data that supports the case for another Federal Reserve rate cut next month. Stocks in Japan and Australia climbed, while Hong Kong’s stock exchange remained open despite severe weather warnings. US equities were little changed, with the S&P 500 flat and the tech-heavy Nasdaq 100 dropping 0.2%.
US Consumer Price Data Supports Rate Cut
The US consumer price data was in line with expectations, with the annualized three-month core rate picking up. The numbers suggest a potential Fed cut in mid-December, with swaps traders increasing the likelihood to around 80% from about 56% earlier Wednesday.
Dollar Remains Steady, Yen Stabilizes
A gauge of the dollar was little changed after advancing on Wednesday. The yen stabilized early Thursday after slumping 0.6% on Wednesday, its third session of weakening, to hit 155 per dollar for the first time since July.
China’s Dollar Bond Issuance Attracts $40 Billion
China’s first dollar bond issuance since 2021 attracted more than $40 billion in bids. The country recently unveiled plans to support its ailing economy.
Australian Unemployment Rate Holds Steady
Australia’s unemployment rate held at 4.1% as expected. Other data set for release includes South Korean money supply and Thai consumer confidence.
Tencent Holdings Ltd. Reports Better-Than-Anticipated Profits
Chinese tech giant Tencent Holdings Ltd. reported better-than-anticipated profits, describing green shoots in the world’s second-largest economy in the wake of stimulus measures announced by Beijing.
Bitcoin Hits Record High
Bitcoin notched another record high, climbing above $93,000 for the first time, with traders exuberant over President-elect Donald Trump’s rhetorical support for crypto.
Inflation Battle Continues
Despite the market relief with Wednesday’s CPI report, the latest figures also underscore the slow and frustrating nature of the battle against inflation. Several Fed officials reiterated their deep uncertainty over how far the central bank will need to lower interest rates.
Key Events This Week
- Eurozone GDP, Thursday
- US PPI, jobless claims, Thursday
- Fed speakers include Jerome Powell, John Williams, and Adriana Kugler, Thursday
- China retail sales, industrial production, Friday
- US retail sales, Empire manufacturing, industrial production, Friday
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