Asian stocks rise, dollar drifts as US rate cut bets rise
By Ankur Banerjee
SINGAPORE (Reuters) -Asian stocks crept higher on Tuesday and the dollar lurked near a five-month low as cooling U.S. inflation bolstered bets the Federal Reserve would cut interest rates early next year.
Oil prices were mixed after both benchmarks — Brent crude and U.S. West Texas Intermediate crude — rose 3% last week in the wake of Houthi attacks on ships that disrupted global shipping and trade, as the Israel-Gaza conflict raged on.
Trading was thin on the day after Christmas with several markets, including those in Australia, Hong Kong, Britain and Germany closed for Boxing Day and the holiday curtailed week also likely to see limited moves.
MSCI's broadest index of Asia-Pacific shares outside Japan was 0.48% higher and is on course for a nearly 2% gain this year, after dropping 20% in 2022.
Japan's Nikkei gained 0.16% and remains the best performing major Asian stock market with a 27% rise in 2023. E-mini futures for the S&P 500 rose 0.15%.
Investors were still digesting data released on Friday that showed U.S. prices fell in November for the first time in more than 3-1/2 years, underscoring the economy's durability.
Inflation, as measured by the personal consumption expenditures (PCE) price index, fell 0.1% last month.
«In a way, markets could not have asked for better news from the continued easing of the core PCE deflator in November,» said Nicholas Chia, Asia macro strategist at Standard Chartered (OTC:SCBFF).
«Thin liquidity conditions are likely to exacerbate the so-called 'Santa Claus rally' in equities ahead of the turn of the year,» Chia added.
The end of the year tends to be a strong period for stocks, a phenomenon dubbed the «Santa Claus Rally.»
Stock investors have cheered recent
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