Publish: 10:53, 23 Dec, 2024

Asia shares rally on US inflation relief

Relief at the avoiding of a US government shutdown and hopes of further policy easing buoy hopes
Online Desk
Asia shares rally on US inflation relief
A passerby stands in front of an electric board displaying the Nikkei stock average outside a brokerage in Tokyo, Japan, September 30, 2024. REUTERS/Kim Kyung-Hoon/File Photo

Asian shares rallied on Monday after a benign reading on US inflation restored some hope for further policy easing on 2025, while there was relief that Washington had averted a government shutdown, reports Reuters.

After the bonanza of recent central bank decisions, this week is much quieter with only the minutes of a few of those meetings due. There are no Federal Reserve speeches and US data is of secondary importance.

Otherwise the themes were largely the same, with the dollar underpinned by a relatively strong economy and higher bond yields, which in turn is a burden for commodities and gold.

It is also a headache for emerging market countries, which are having to intervene to stop their currencies from falling too far and stoking domestic inflation.

For now, the afterglow from the US inflation report was enough to lift MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.3%.

Japan's Nikkei .N225 gained 0.7% and South Korea .KS11 firmed 0.9%.

S&P 500 futures ESc1 added 0.3%, while Nasdaq futures NQc1 firmed 0.4%. The S&P 500 fell almost 2% last week and the Nasdaq 1.8%, though the latter is still up 30% for the year.

Analysts at BofA noted the S&P 500 was up 23% for the year, but if the 12 largest companies were excluded the gain was only 8%. They cautioned such extreme concentration was a vulnerability going into 2025.

Wall Street had rallied on Friday when a key gauge of core US inflation printed lower than expected at 0.11%, providing a partial antidote to the Fed's hawkishness earlier in the week. 0#USDIRPR

Fed funds futures rallied to imply a 53% chance of a rate cut in March and 62% for May, though they only have two quarter-point easings to 3.75-4.0% priced in for all of 2025. A few months ago, the market had hoped rates would bottom around 3.0%.

The prospect of fewer cuts has combined with expectations of more debt-funding government spending to pressure bond markets, with 10-year yields US10YT=RR surging almost 42 basis points in just two weeks for the biggest such increase since April 2022.

"The recent firming in core inflation has interacted with a rising threat of tariffs and immigration restrictions to temper the Fed's inflation optimism," noted JPMorgan economist Michael Feroli.

"Given our inflation and unemployment rate forecasts, we continue to look for 75bp of cuts next year with a hold in January and a quarterly cadence thereafter."

In currency markets, the dollar index held near two-year highs at 107.970 -USD having climbed 1.9% for the month so far. The euro looked vulnerable at $1.0432 EUR=EBS having again tested support around $1.0331/43 last week. USD/

The dollar was firm at 156.44 JPY=EBS, having gained 4.5% so far in December, but faces more threats of Japanese intervention should it challenge the 160.00 barrier.

The strong dollar combined with high bond yields to weigh on gold, which stood at $2,624 an ounce after slipping 1% last week. GOL/

The high dollar is also a burden for oil, already hampered by concerns over Chinese demand following dismal retail sales figures last week. O/R

Brent LCOc1 was up 4 cents at $73.00 a barrel, while US crude CLc1 gained 12 cents to $69.58 per barrel.

Bd-pratidin English/ Afia

More News
Finance Adviser hints at corporate tax cuts in upcoming budget
Finance Adviser hints at corporate tax cuts in upcoming budget
CPD recommends raising tax-free income limit to Tk 4 lakh
CPD recommends raising tax-free income limit to Tk 4 lakh
Gold prices hiked by Tk2,613 per bhori
Gold prices hiked by Tk2,613 per bhori
Chinese solar company to invest in Bangladesh: envoy
Chinese solar company to invest in Bangladesh: envoy
Iran, Bangladesh discuss ways to expand bilateral trade
Iran, Bangladesh discuss ways to expand bilateral trade
NBR to digitise operations under master plan
NBR to digitise operations under master plan
Trump establishes Bitcoin reserve as digital Fort Knox
Trump establishes Bitcoin reserve as digital Fort Knox
Biman posts a 36 pc sales growth in 5 months
Biman posts a 36 pc sales growth in 5 months
Peanut farming sees promising prospects in Panchagarh
Peanut farming sees promising prospects in Panchagarh
Indian loan disbursements below expectations, projects under review
Indian loan disbursements below expectations, projects under review
Malaysian police investigate crypto investment scams as 2 victims lose huge
Malaysian police investigate crypto investment scams as 2 victims lose huge
China's Ecarx in talks with VW to develop smart cars for Europe, US, CEO says
China's Ecarx in talks with VW to develop smart cars for Europe, US, CEO says
Latest News
Newcastle end 56-year trophy drought
Newcastle end 56-year trophy drought
8 minutes ago | Sports
Erdogan backs Trump’s efforts to end Russia-Ukraine war
Erdogan backs Trump’s efforts to end Russia-Ukraine war
10 minutes ago | International
59 people killed in nightclub fire in North Macedonia
59 people killed in nightclub fire in North Macedonia
16 minutes ago | International
Hamza's coming home
Hamza's coming home
28 minutes ago | Sports
Finance Adviser hints at corporate tax cuts in upcoming budget
Finance Adviser hints at corporate tax cuts in upcoming budget
32 minutes ago | Business
Implementing prof Yunus’ philosophy to end violence against women
Implementing prof Yunus’ philosophy to end violence against women
49 minutes ago | National
Foreigners to make grand appearance in Eid ‘Ityadi’ again
Foreigners to make grand appearance in Eid ‘Ityadi’ again
56 minutes ago | Entertainment
Govt. recommends withdrawal of 6,202 ‘politically motivated’ cases
Govt. recommends withdrawal of 6,202 ‘politically motivated’ cases
1 hour ago | National
Ex-Nagorik Committee leader announces new political platform
Ex-Nagorik Committee leader announces new political platform
1 hour ago | National
Report of ‘No parade on Independence Day’ is untrue: CA press wing
Report of ‘No parade on Independence Day’ is untrue: CA press wing
10 hours ago | National
CPD recommends raising tax-free income limit to Tk 4 lakh
CPD recommends raising tax-free income limit to Tk 4 lakh
10 hours ago | Business
Yemen vows ‘professional and painful’ response to US strikes
Yemen vows ‘professional and painful’ response to US strikes
11 hours ago | International
Oscar for Emergency? Kangana says America can keep their ‘silly’ award
Oscar for Emergency? Kangana says America can keep their ‘silly’ award
11 hours ago | Entertainment
Gold prices hiked by Tk2,613 per bhori
Gold prices hiked by Tk2,613 per bhori
11 hours ago | Business
Cuba begins restoring power to Havana, outlying provinces
Cuba begins restoring power to Havana, outlying provinces
11 hours ago | International
Fakhrul urges quick national election to restore stability
Fakhrul urges quick national election to restore stability
11 hours ago | National
People won’t tolerate excuse of delaying elections: Nazrul Islam
People won’t tolerate excuse of delaying elections: Nazrul Islam
12 hours ago | National
CA to hold special meeting with police tomorrow
CA to hold special meeting with police tomorrow
12 hours ago | National
Tarique promises trial for killings in 2024 uprising if BNP wins
Tarique promises trial for killings in 2024 uprising if BNP wins
12 hours ago | National
DMP urges people not to create suffering by blocking roads
DMP urges people not to create suffering by blocking roads
13 hours ago | City
Air chief leaves for USA
Air chief leaves for USA
13 hours ago | National
Travel ban imposed on Papon, his family
Travel ban imposed on Papon, his family
13 hours ago | National
Chinese solar company to invest in Bangladesh: envoy
Chinese solar company to invest in Bangladesh: envoy
13 hours ago | Business
BFIDC urged to produce eco-friendly products
BFIDC urged to produce eco-friendly products
13 hours ago | National
Court freezes 27 bank accounts of ex-MP Papon, family
Court freezes 27 bank accounts of ex-MP Papon, family
13 hours ago | National
Govt recommends to withdraw 6,202 politically motivated cases
Govt recommends to withdraw 6,202 politically motivated cases
14 hours ago | National
SpaceX discusses over probable Starlink services at Bangladesh’s airports
SpaceX discusses over probable Starlink services at Bangladesh’s airports
14 hours ago | Tech
Iran, Bangladesh discuss ways to expand bilateral trade
Iran, Bangladesh discuss ways to expand bilateral trade
15 hours ago | Business
Iran denies again aiding Yemen's Houthi rebels
Iran denies again aiding Yemen's Houthi rebels
15 hours ago | International
Training for transport workers to prevent sexual harassment in public transport
Training for transport workers to prevent sexual harassment in public transport
15 hours ago | National
Most Read
Train tickets for March 26 available online
Train tickets for March 26 available online
23 hours ago | National
Train commuters urged to buy Eid tickets from official app, counters
Train commuters urged to buy Eid tickets from official app, counters
18 hours ago | National
EU calls for international standard election in Bangladesh: CEC
EU calls for international standard election in Bangladesh: CEC
18 hours ago | National
Tarique Rahman takes responsibility for two Pabna orphans
Tarique Rahman takes responsibility for two Pabna orphans
19 hours ago | National
New Zealand romp to nine-wicket win in first Pakistan T20
New Zealand romp to nine-wicket win in first Pakistan T20
21 hours ago | Sports
What does spending a long time in space do to the human body?
What does spending a long time in space do to the human body?
20 hours ago | Lifestyle
UN Secretary General leaves Dhaka
UN Secretary General leaves Dhaka
22 hours ago | National
Dhaka Central University to be established with 7 colleges
Dhaka Central University to be established with 7 colleges
18 hours ago | City
Sunlight exposure offers life-changing health benefits, experts say
Sunlight exposure offers life-changing health benefits, experts say
19 hours ago | Lifestyle
Bashundhara Shuvosangho distributes Iftar among job holders
Bashundhara Shuvosangho distributes Iftar among job holders
23 hours ago | Shuvosangho
BNP to introduce three secretary generals
BNP to introduce three secretary generals
22 hours ago | Special
Dhaka ranks 15th today in global air pollution
Dhaka ranks 15th today in global air pollution
23 hours ago | City
10 timeless habits to reconnect and nourish your soul
10 timeless habits to reconnect and nourish your soul
21 hours ago | Lifestyle
Bangladeshi migrant flow increases on Mediterranean route to Europe
Bangladeshi migrant flow increases on Mediterranean route to Europe
22 hours ago | National
Can aspirin help fight cancer?
Can aspirin help fight cancer?
21 hours ago | Lifestyle
Weather Forecast: Mild heat wave sweeps across several districts
Weather Forecast: Mild heat wave sweeps across several districts
22 hours ago | National
Peanut farming sees promising prospects in Panchagarh
Peanut farming sees promising prospects in Panchagarh
21 hours ago | Business
OpenAI and Musk agree to fast tracked trial over for-profit shift
OpenAI and Musk agree to fast tracked trial over for-profit shift
23 hours ago | Tech
David Warner set for Telugu film debut with cameo in ‘Robinhood’
David Warner set for Telugu film debut with cameo in ‘Robinhood’
22 hours ago | Entertainment
China’s Baidu unveils two new AI models amid rising competition
China’s Baidu unveils two new AI models amid rising competition
22 hours ago | Tech
NASA's stranded astronauts greet their replacements at space station
NASA's stranded astronauts greet their replacements at space station
22 hours ago | Tech
Five protein-rich alternatives to meat during Ramadan
Five protein-rich alternatives to meat during Ramadan
22 hours ago | Lifestyle
Blast from suspected old bomb in Syria kills 16
Blast from suspected old bomb in Syria kills 16
19 hours ago | International
Reforms to make Bangladesh one of the perfect democracies
Reforms to make Bangladesh one of the perfect democracies
21 hours ago | National
Death sentence of 20 BUET students in Abrar murder case upheld
Death sentence of 20 BUET students in Abrar murder case upheld
20 hours ago | National
Myanmar village air strike kills at least 12: Local official
Myanmar village air strike kills at least 12: Local official
21 hours ago | International
Judge temporarily blocks Trump's use of wartime powers to target Venezuelan gang members
Judge temporarily blocks Trump's use of wartime powers to target Venezuelan gang members
22 hours ago | International
Indian loan disbursements below expectations, projects under review
Indian loan disbursements below expectations, projects under review
23 hours ago | Business
Telegram's Durov allowed to leave France amid probe
Telegram's Durov allowed to leave France amid probe
20 hours ago | Tech
Virat Kohli not ready to retire
Virat Kohli not ready to retire
20 hours ago | Sports