Shares advanced in Asia after US stocks resumed a rally fueled by fresh data that backed the case for the Federal Reserve to cut interest rates more than currently anticipated.
A gauge of regional equities gained for a third time in four days with mainland China benchmarks edging higher after earlier falls. The S&P 500 climbed 1% Thursday, putting the index on course for an eighth week of gains.
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US GDP growth was revised lower to a 4.9% annualized reading in the third quarter, missing consensus projections, according to data published Thursday. Personal consumption data also came in softer than economists had anticipated. Swaps traders are pricing in around 150 basis points of Fed cuts next year, twice as much as the central bank signaled.
Attention is now turning to the release of a key inflation gauge that may help shape the outlook for US monetary policy. Economists predict that annual growth in the core personal consumption expenditures price index, the Fed’s preferred gauge of underlying inflation, slowed to 3.3% in November from 3.5% the previous month.
“Focus today is on core PCE tonight and one should be mindful of the razor-thin liquidity heading into the festive season as data surprise may exacerbate price movement,” said Christopher Wong, FX strategist at Oversea-Chinese Banking Corp.
Ahead of the US data, Treasuries were trading within tight ranges, while US stock futures crept lower. Bloomberg’s index of dollar strength was little changed after sliding 0.6% Thursday. In commodities, oil extended its biggest weekly advance in two months as shippers avoided the Red Sea amid increased attacks, while Angola’s exit from OPEC put the spotlight on the group’s unity. Gold was on track for a weekly gain.
In Hong Kong, technology shares fell after Chinese regulators said they will curb excessive spending and rewards that encourage online gaming, laying down the latest tightening measures for the world’s biggest mobile games arena.
Traders will also be gauging the impact of China’s decision to halt some exports of rare-earth technologies, the latest move in a rift between the Asian nation and the US. China is the world’s dominant supplier of rare earth materials.
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In corporate news, Nike’s shares fell more than 10% in late trading after the company said it’s looking for as much as $2 billion in cost savings by dismissing workers and simplifying the apparel giant’s product assortment amid a weaker sales outlook.
Key events this week:
- UK GDP, Friday
- US personal income and spending, new home sales, durable goods, University of Michigan consumer sentiment index, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures fell 0.1% as of 12:53 p.m. Tokyo time
- Nikkei 225 futures (OSE) were unchanged
- Japan’s Topix rose 0.5%
- Australia’s S&P/ASX 200 was little changed
- Hong Kong’s Hang Seng was little changed
- The Shanghai Composite rose 0.5%
- Euro Stoxx 50 futures were little changed
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro fell 0.1% to $1.0998
- The Japanese yen fell 0.3% to 142.51 per dollar
- The offshore yuan fell 0.2% to 7.1592 per dollar
- The Australian dollar fell 0.3% to $0.6779
Cryptocurrencies
- Bitcoin was little changed at $43,989.01
- Ether was little changed at $2,246.95
Bonds
- The yield on 10-year Treasuries advanced one basis point to 3.90%
- Japan’s 10-year yield advanced 3.5 basis points to 0.620%
- Australia’s 10-year yield advanced one basis point to 4.03%
Commodities
- West Texas Intermediate crude rose 1% to $74.62 a barrel
- Spot gold rose 0.1% to $2,048.46 an ounce
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