Asian Shares Hit Two-Month Highs: In a resounding echo of Wall Street’s upbeat momentum, Asian shares soared to fresh two-month highs. The dollar, on the flip side, lingered near its lowest point in two-and-a-half months, fueled by growing expectations that the U.S. Federal Reserve is putting the brakes on interest rate hikes.
MSCI’s Asia-Pacific shares outside Japan rallied 0.91%, hitting 509.82, the highest since September 18. A stellar 7% surge in the month positions it for the most significant monthly gain since January. While Japan’s Nikkei experienced a minor dip of 0.15%, the index remains up approximately 28% for the year, securing its spot as Asia’s best-performing stock market.
China’s CSI300 Index gained 0.66%, and Hong Kong’s Hang Seng Index rose by 1.25%, buoyed by easing U.S.-Sino tensions. Wall Street’s bullish run, particularly Nasdaq’s 1% rally led by Microsoft’s record high, set the tone. Investor attention now shifts to Nvidia’s earnings and the Federal Reserve‘s meeting minutes for crucial rate insights.
November has seen a broad market rebound as U.S. inflation signals a potential slowdown, prompting optimism that the Fed’s monetary tightening may be reaching its end, paving the way for future rate cuts.
Traders are pricing in a December freeze on interest rates, and some are even factoring in potential rate cuts as early as March. However, caution prevails, as economic data remains a wild card that could sway the Fed’s policy outlook.
Amid the holiday week leading up to U.S. Thanksgiving and limited data releases, trading is expected to tread cautiously. Treasury yields, reflecting market expectations, edged lower. The dollar, measured by the dollar index, slipped to 103.37.
Oil prices paused after Monday’s surge due to global economic slowdown concerns. Brent dropped to $82.23, while U.S. crude fell to $77.79. Record U.S. crude output and concerns over Chinese demand growth continue to plague the oil market.
As markets hit a plateau, there’s a sense that a new catalyst may be needed for the next significant move. Whether it’s earnings, Fed cues, or an external jolt, the landscape remains in flux, requiring a keen eye on evolving market dynamics.