Asian markets mixed with focus on US inflation data, Fed meeting

Asian markets mixed with focus on US inflation data, Fed meeting

Investors are keenly awaiting US November inflation data and next week's Federal Reserve meeting
Investors are keenly awaiting US November inflation data and next week's Federal Reserve meeting. Photo: Yuki IWAMURA / AFP/File
Source: AFP

PAY ATTENTION: Never miss breaking news – join Briefly News' Telegram channel!

Asian markets were mixed Friday as optimism about China's economic reopening continues to face off against concerns about rising interest rates and a possible recession.

With few Thursday catalysts to work with, traders were setting their sights on the release of two key US inflation reports -- on Friday and Monday -- and the Federal Reserve's final policy meeting of the year.

In light of data signalling almost a year of interest rate hikes was beginning to impact prices, the US central bank is widely expected to announce a 50 basis point lift at the gathering, compared with the previous four straight 75-point increases.

But there remains some concern that the world's top economy remains resilient and the jobs market too strong, meaning the Fed might have to keep tightening monetary policy longer than had been hoped.

Read also

Asian markets mixed as recession fears dampen China optimism

That uncertainty has weighed on US markets, which have endured a tough December so far, and analysts warned of further pain.

"We think the worst is yet to come," Gary Schlossberg, at Wells Fargo Investment Institute, told Bloomberg Television.

PAY ATTENTION: Follow Briefly News on Twitter and never miss the hottest topics! Find us at @brieflyza!

"We’re looking for a moderate recession next year, which means a moderate decline in corporate profits is our target for the year."

The mood was slightly better in Asia, particularly Hong Kong, where investor sentiment has been buoyed by China's decision to shift away from its nearly three-year zero-Covid strategy of lockdowns and mass testing that has battered the economy.

After widespread protests across the country, leaders have decided to loosen their grip, fanning excitement that growth will pick up as activity returns to normal.

A pledge to help the embattled property sector, which accounts for a huge part of the economy, was also providing a lift.

Read also

Asian equities, oil prices dragged by recession fears

"The process will likely be gradual and bumpy over the year ahead, due to low immunisation of the population and unpreparedness of the health system to deal with a possible further surge in cases," Silvia Dall’Angelo, at Federated Hermes, said in a note.

"Reopening should gain traction in the second half of next year. At that stage, the Chinese recovery will likely accelerate, as the removal of restrictions will allow fiscal and monetary stimulus to be effective."

And JPMorgan strategist Marko Kolanovic added that he "remains positive on China, due to favorable monetary conditions as well as an eventual full reopening and end of Covid".

Hong Kong rose in early trade, along with Tokyo, Sydney, Seoul, Singapore and Taipei, though Shanghai, Wellington, Manila and Jakarta edged down.

Oil prices rose after another big drop, with both main contracts down more than 10 percent this week as expectations for a recession in the United States and elsewhere weighed on demand expectations.

Read also

Asian markets swing as Fed worries offset China Covid easing

Key figures around 0230 GMT

Tokyo - Nikkei 225: UP 1.4 percent at 27,946.21 (break)

Hong Kong - Hang Seng Index: UP 0.3 percent at 19,498.04

Shanghai - Composite: DOWN 0.2 percent at 3,189.58

Euro/dollar: UP at $1.0570 from $1.0560 on Thursday

Dollar/yen: DOWN at 136.29 yen from 136.61 yen

Pound/dollar: UP at $1.2255 from $1.2239

Euro/pound: DOWN at 86.22 pence from 86.24 pence

West Texas Intermediate: UP 1.0 percent at $72.16 per barrel

Brent North Sea crude: UP 0.9 percent at $76.82 per barrel

PAY ATTENTION: Сheck out news that is picked exactly for YOU ➡️ find the “Recommended for you” block on the home page and enjoy!

Source: AFP

Authors:
AFP avatar

AFP AFP text, photo, graphic, audio or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP news material may not be stored in whole or in part in a computer or otherwise except for personal and non-commercial use. AFP will not be held liable for any delays, inaccuracies, errors or omissions in any AFP news material or in transmission or delivery of all or any part thereof or for any damages whatsoever. As a newswire service, AFP does not obtain releases from subjects, individuals, groups or entities contained in its photographs, videos, graphics or quoted in its texts. Further, no clearance is obtained from the owners of any trademarks or copyrighted materials whose marks and materials are included in AFP material. Therefore you will be solely responsible for obtaining any and all necessary releases from whatever individuals and/or entities necessary for any uses of AFP material.