(Bloomberg) — Asian stocks started the week with a cautious tone, as investors grappled with South Korea’s political upheaval and awaited fresh stimulus from China. Oil was steady after the Syrian government was toppled.
Korea’s equity benchmark dropped as much as 1.8% in opening trade, with Australian shares also slipping. Japanese stocks were flat. Futures pointed to a soft open in Hong Kong. The dollar and the yield on 10-year Treasuries were steady.
Investors are readying themselves this week for a final flurry of central bank decisions across four continents, a key meeting of Chinese officials and US inflation data in an effort to pad returns for the year and help guide positions into 2025. A gauge of global stocks has advanced more than 20% this year, on track for a second straight outsized annual gain, according to data compiled by Bloomberg.
“It will be a lively week ahead with event risk all over the shop,” Chris Weston, head of research at Pepperstone Group Ltd. in Melbourne, wrote in a note to clients. “A hot US CPI print may not necessarily derail a cut at next week’s FOMC meeting” but it may effect the outlook for further easing and move the dollar.
Korea remains a focus in Asia, as some lawmakers pushed for President Yoon Suk Yeol to resign amid mounting public anger over the brief imposition of martial law last week. Opposition lawmakers said they would push for another impeachment vote on Yoon after he survived the first one. Officials vowed Monday to closely monitor the country’s economy and markets.
Meanwhile, the People’s Bank of China’s daily fixing of the yuan will be parsed after the central bank signaled support for the currency through a series of strong fixings last week. That comes ahead of consumer and producer price data that may point to sluggish demand in the world’s second largest economy and add to expectations of more fiscal support from the Central Economic Work Conference which is due to start on Wednesday.
“There is a reasonable case to be made that China may have been keeping its powder dry pending US trade policy changes from January,” Barclays strategists led by Themistoklis Fiotakis write in a note to clients. Given there’s scope for some dollar easing, “yuan depreciation pressures should also ease temporarily given PBOC resistance at about 7.30” per dollar.
Middle-East
Crude was flat after Saudi Arabia cut prices for buyers in Asia by more than expected after OPEC+ further delayed a lift to production.
Syrian President Bashar al-Assad and his family arrived in Moscow, where they were granted asylum by the Russian government, Russian state agency TASS reported Sunday. Russia’s foreign ministry said Assad decided to step down as Syrian president and left his country.
In response to possible tensions between the incoming administration and the US central bank, Trump told NBC’s Meet the Press on Sunday that he has no plans to replace Fed Chair Jerome Powell once he returns to the White House. Markets are now pricing a roughly 80% chance the Fed cuts at its December meeting, though officials have cautioned on the pace of further cuts.
The Fed’s projections already offer a gradual pace of easing “yet even slower cuts and potentially a pause could be warranted,” Societe Generale economists including Klaus Baader wrote in a note to clients. “We expect a 25 basis-point rate cut at the December FOMC meeting but even that is dependent on upcoming CPI.”
Elsewhere this week, Australia’s central bank will likely keep its key interest rate on hold amid indications the nation’s economy is beginning to soften. The European Central Bank, Bank of Canada and Swiss National Bank are all expected to ease policy, while the Brazilian central bank may hike to arrest inflation pressures.
In other commodities, gold edged higher in early trading on Monday after China’s central bank expanded its gold reserves in November, ending a six-month pause in purchases.
Key events this week:
Japan GDP, current account, Monday
China PPI, CPI, Monday
Mexico CPI, Monday
Australia rate decision, Tuesday
Germany CPI, Tuesday
Brazil CPI, Tuesday
Japan PPI, Wednesday
Chinese leaders expected to hold annual Central Economic Work Conference, beginning Wednesday through Dec. 12
RBA Deputy Governor Andrew Hauser speaks, Wednesday
US CPI, Wednesday
Canada rate decision, Wednesday
Brazil rate decision, Wednesday
Australia unemployment, Thursday
India CPI, Thursday
Eurozone ECB rate decision, Thursday
Switzerland rate decision, Thursday
France CPI, Friday
Eurozone industrial production, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 9:05 a.m. Tokyo time
Hang Seng futures fell 0.6%
Japan’s Topix rose 0.3%
Australia’s S&P/ASX 200 fell 0.5%
Euro Stoxx 50 futures rose 0.4%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0559
The Japanese yen was little changed at 149.89 per dollar
The offshore yuan was little changed at 7.2788 per dollar
Cryptocurrencies
Bitcoin rose 0.9% to $100,960.26
Ether was little changed at $3,997.35
Bonds
Commodities
This story was produced with the assistance of Bloomberg Automation.
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