Aurelia Butler

SYDNEY (Reuters) – Asian share markets were in a wary mood on Monday as surging bond yields challenged equity valuations, particularly for the richly priced tech sector, in a week packed with central bank meetings and major economic data.Interest rates are expected to fall in the United States and Sweden, and hold steady in Japan, the UK and Norway.The Federal Reserve will lead the pack on Wednesday with markets pricing a 96% probability it will cut rates by 25 basis points to a new range of 4.25% to 4.50%. More important will be any guidance on future easing, including the “dot plot” forecasts of Fed members for rates over the next couple of years.”We look for the updated dots to signal a median expectation for three cuts next year, down from four in the September projection,” said JPMorgan economist Michael Feroli. “The median longer-run dot, which was 2.875% in September, we see moving up to 3% or maybe even 3.125%.””That said, given the vagaries of trade and other policies next year, the signal from the dots may be even less useful than ordinarily.”Investors have been steadily scaling back expectations of how far rates may fall, in part reflecting solid economic news and speculation President-elect Donald Trump’s plans for tax cuts and tariffs would expand government borrowing while putting upward pressure on inflation.Futures imply only two more cuts next year and rates bottoming out around 3.80%, much higher than just a few months ago. That outlook took a heavy toll on the Treasury market last week, where longer-dated yields recorded their largest weekly rise this year. [US/]Yields on 10-year notes were up at 4.39%, having climbed 24 basis points last week alone, and threatening to breach a major bear target at 4.50%.Rising yields make bonds more attractive versus equities while lifting the level that future cash flows are discounted at and possibly the cost of capital for companies.Bitcoin grabbed the spotlight in early Asian trade on Monday, surging to a record high above $105,000 as it extended gains on bets Trump’s return will usher in a cryptocurrency-friendly regulatory environment.S&P 500 futures were a fraction lower on Monday, while Nasdaq futures eased 0.1%. CHINA STRUGGLESMSCI’s broadest index of Asia-Pacific shares outside Japan was little changed, having been flat last week.Japan’s Nikkei edged up 0.1%, while South Korea bounced 0.7% on pledges of government support.China’s blue chip index took a hit on Friday as investors awaited more detail on possible stimulus steps.Over the weekend, an official at China’s central bank said it had room to further cut the reserve requirement ratio, though credit numbers out last week showed past easing had done little to boost borrowing.Figures on Chinese retail sales, industrial production and house prices for November are due out later Monday.A range of surveys on global manufacturing are also due Monday, while U.S. retail sales is due on Tuesday and a major inflation report on Friday.The Bank of Japan, Bank of England and Norges Bank are expected to stand pat on Thursday, while the Riksbank is seen cutting rates and perhaps by 50 basis points.In currency markets, the dollar has been underpinned by rising yields and put the squeeze on a raft of emerging market currencies, forcing intervention in some cases.The dollar likewise held firm on the yen at 153.53, having jumped almost 2.5% last week. The dollar index stood at 106.870, after rising 0.9% last week.The euro looked wobbly at $1.0508, not helped by news ratings agency Moody’s (NYSE:MCO) unexpectedly downgraded France on Friday.The action came a few hours after French President Macron appointed veteran centrist Francois Bayrou as the country’s fourth premier in a year.Political uncertainty was also clouding South Korea where the finance ministry vowed to support markets after President Yoon Suk Yeol was impeached.A firm dollar combined with higher bond yields to restrain gold at $2,685 an ounce. [GOL/]Bitcoin was having better luck, breaking above $105,000 for the first time and was last fetching $104,955. Oil prices were supported around three-week highs by expectations that additional sanctions on Russia and Iran could tighten supplies. [O/R]Brent was down 2 cents at $74.47 a barrel, while U.S. crude eased 12 cents to $71.17 per barrel. More

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SEOUL (Reuters) – South Korea’s finance ministry said on Monday authorities would continue monitoring financial and foreign exchange markets. South Korea’s parliament on Saturday voted to impeach President Yoon Suk Yeol over his short-lived attempt to impose martial law, a move that had shocked the nation and its financial markets. More

Yoon was impeached in a second vote by South Korea’s opposition-led parliament over his short-lived attempt to impose martial law, which shocked the nation.KCNA had reported for the first time on Dec. 11 South Korea’s martial law crisis which was sparked on Dec. 3. On Monday, KCNA did not offer much commentary, but called Yoon’s defiant televised remarks on Dec. 12 “a press statement spliced with lies and obstinacy” and noted the rally in front of South Korean parliament that called for Yoon’s impeachment. It also noted media reports on various South Korean military and police officials’ suspension from duties and ongoing investigation into Yoon. After the impeachment vote passed on Saturday, South Korea’s acting defence minister, Kim Seon-ho, called on the military to maintain preparedness and ordered commanding officers to work promptly to stabilise their troop commands.On Saturday, Ukraine’s President Volodymyr Zelenskiy said Russia has begun using North Korean troops in significant numbers for the first time to conduct assaults on Ukrainian forces battling to hold an enclave in Russia’s Kursk region. More

(Reuters) – A look at the day ahead in Asian markets. Asia kicks off the final full trading week of 2024 with the monthly ‘China data dump’ landing on Monday, and with investors leaning toward keeping the stock market bull run going as central banks around the world go into easing mode.Several G10 central banks last week cut interest rates or, in the case of Australia, signaled it may do so soon, and authorities in China pledged to dive even deeper into monetary and fiscal stimulus territory. This helped buoy risk appetite, despite the inclination to take chips off the table ahead of year-end and with Wall Street at record highs. Another wave of G10 central bank decisions, including from the Federal Reserve, will go a long way to determining whether that continues this week. A quarter point rate cut from the Fed is a near certainty, according to futures market pricing, while in Asia, the focus will be on the Bank of Japan.The BOJ is heading in the other direction, slowly ‘normalizing’ policy after years of zero interest rates. Could the stronger-than-expected ‘Tankan’ survey of business conditions last week seal a rate hike this week? Economist Phil Suttle thinks it should. “The question now is whether the BoJ has the confidence to make the move or whether …(Governor Kazuo) Ueda might prefer to wait (for what?). Importantly, rate normalization would be presented as a success, not as a problem,” Suttle wrote on Friday.Meanwhile, the South Korean won could come under further selling pressure after President Yoon Suk Yeol’s impeachment on Saturday, the latest twist in a remarkable crisis sparked by his surprise decision to impose martial law on Dec. 3.Monday’s economic calendar in Asia is packed with potential market-moving releases, especially the clutch of Chinese economic indicators including industrial production, fixed asset investment, retail sales, house prices and unemployment.This comes days after Beijing said it will increase the budget deficit, issue more debt and loosen monetary policy to support growth. China is girding for more trade tensions with the U.S., and U.S. Treasury Secretary Janet Yellen told Reuters on Friday that Washington won’t rule out sanctions on banks and further curbs on “dark fleet” tankers.Investors have welcomed Beijing’s stimulus announcements since September. But only time will tell if they will pull the economy out of a property sector bust and deflation, revive growth, and draw investment back into the country.Official data on Monday are expected to show that the annual rate of industrial production and fixed asset investment growth last month held steady, while retail sales growth dipped slightly.House price data for November also will be released after October’s 5.9% year-on-year fall was the steepest decline in almost 20 years.Here are key developments that could provide more direction to markets on Monday:- China ‘data dump’ (November)- Australia, India manufacturing PMIs (November)- Japan machinery orders (October) More

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