Australian and Japanese equities climbed while Hong Kong futures were steady. The S&P 500 rose 0.8% and the Nasdaq 100 advanced 1.9% to a new high Wednesday, with the strong showing for tech pushing Amazon.com Inc and Meta Platforms Inc. to fresh records. Broadcom Inc. rose 6.6% following a report that the chipmaker was working on an AI deal with Apple Inc.
Treasuries were steady in early Asian trading after a selloff in the prior session sent yields higher across the curve. Yields for Australian and New Zealand government debt edged higher Thursday.
The moves followed US consumer price index data that came in line with expectations, cementing forecasts for the Fed to cut rates by 25 basis points later in December. Swaps traders have now virtually priced in such a move, compared with a 75% chance a week ago.
The inflation data, “gives the Federal Reserve the green light for a 25 basis point rate cut at the December meeting, as it helps to confirm that we are still making progress on inflation even though it remains sticky,” according to Skyler Weinand, chief investment officer at Regan Capital.
In Asia, economic reports set for release Thursday include labor market data for Australia, and inflation and industrial production for India.An index of dollar strength fell Thursday, moderating a gain on Wednesday that was helped along by the higher Treasury yields. China’s yuan slid the most in a week following a report that Beijing is considering allowing the currency to weaken next year in response to the threat of a trade war with the US.Meanwhile, China’s two-day Central Economic Work Conference is expected to map out policies for next year, following stimulus signals from top leaders.
Officials must focus on, “how will they deliver fiscal stimulus more directly to consumers so the economy can more directly shift to consumption-led rather than investment led,” Amy Xie Patrick, head of income strategies for Pendal Group, said on Bloomberg Television.
The yen strengthened against the greenback, paring a decline on Wednesday. Bank of Japan officials see little cost to waiting before raising interest rates, while still being open to a hike next week depending on data and market developments, according to people familiar with the matter.