Asian shares hit three-month peak as Fed pivot rally rolls on
By Stella Qiu
SYDNEY (Reuters) — Asian shares hit a three-month peak on Friday as sharp declines in the dollar and U.S. yields extended the Fed-fuelled rally, but pushback on rate cuts from central banks in Europe may deal a blow to the global pivot hopes.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.7% to the highest since early September and was up 2.5% for the week. Japan's Nikkei jumped 1.2%, also heading for a weekly gain of 2.5%.
Battered Chinese bluechips rose 0.7% to pull away from a five-year low, while Hong Kong's Hang Seng index rallied 1.7%.
China's central bank on Friday boosted liquidity injections but kept the interest rate unchanged when rolling over maturing medium-term policy loans, matching expectations.
Investors are awaiting a slew of Chinese economic data to see if the slowdown in the world's second largest economy has further to run.
«Everyone is popping the corks now and celebrating that we've got the Fed pivot. But the Fed pivot happened two months ago… It has now got to the point where I think you need to be a little bit careful,» said Tony Sycamore, analyst at IG.
«I think rate cuts are priced in a little bit too generously. I wouldn't be surprised if it would be pushed back to maybe May or June more towards the middle of the year in terms of the first cut and only four cuts.»
On Wall Street, the Dow Jones climbed to a fresh all-time high and the S&P 500 and Nasdaq made new 2023 highs, as markets wagered on a total of 150 basis points in easing expectations — equivalent of six cuts — for the Fed next year. [.N]
Overnight, a host of Europe's central banks stuck to plans to keep policy tight well into next year, dashing any hope that the Fed's pivot towards rate cuts
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