The Bank of Russia unexpectedly maintained its key interest rate at a record-high 21% , defying analysts’ expectations of another significant hike as inflation remains stubbornly elevated. The decision marks a shift toward a more measured approach in balancing economic growth and price stability. Key Details Inflation Concerns: Annual inflation climbed to 8.9% in November, well above the central bank’s 4% target , with inflation expectations reaching 13.9% in December. Policy Rationale: The central bank cited the significant tightening of monetary conditions after October’s 200-basis point hike as sufficient to resume disinflationary processes. Governor Elvira Nabiullina emphasized avoiding both economic overheating and severe slowdowns. Economic Overheating: Elevated government spending on the war in Ukraine and social programs, coupled with labor shortages and rising wages, have fueled strong domestic demand, exacerbating price pressures...
Asian Stocks Edge Higher After Mixed US Tech Results, Ahead of Key US Election and Fed Rate Decision
Asian stocks made modest gains following mixed earnings from Wall Street tech companies, as traders brace for next week's US election and the Federal Reserve’s rate decision.
Japan's stocks rose, while Australia and South Korea saw slight declines. US stock futures showed gains after the S&P 500 closed up by 0.2%, and the Nasdaq Composite hit a record high. Despite Alphabet Inc. climbing over 5% after beating earnings expectations, Advanced Micro Devices Inc. dropped 7% due to a weak revenue forecast.
Treasury yields edged lower, and the US dollar slipped after three days of gains. Gold hit a fresh record, and Bitcoin remained near its all-time high.
Traders in Asia are preparing for key market moves following the Bank of Japan's decision on Thursday and a potential fiscal stimulus announcement from China at a top legislative meeting on November 4-8. Asia's regional equity benchmark is set for its worst monthly performance in a year.
Investors are also eyeing the US Fed decision next week, with US job openings data showing a decline, prompting traders to adjust their expectations for rate cuts. Additionally, consumer confidence in the US hit its highest level this year.
Treasury bonds are on track for their worst month in over two years, while oil steadied after a sharp drop due to easing concerns over the Middle East conflict affecting supply.
In Australia, core inflation remained high last quarter, indicating persistent price pressures. Meanwhile, the yen advanced after a recent decline.
Key Events This Week:
- Eurozone GDP and consumer confidence on Wednesday
- US GDP, ADP employment, and pending home sales on Wednesday
- Earnings from Meta Platforms and Microsoft on Wednesday
- Bank of Japan's rate decision on Thursday
- Amazon and Apple earnings on Thursday
- US employment data and ISM manufacturing on Friday
Market Moves (As of 9:42 am Tokyo Time):
- S&P 500 futures rose 0.3%
- Nikkei 225 futures up 0.7%, Topix rose 0.5%
- Australia’s S&P/ASX 200 fell 0.2%
- Hang Seng futures dropped 0.2%
- Euro Stoxx 50 futures were little changed
- Nasdaq 100 futures rose 0.3%
Currency Movements:
- Bloomberg Dollar Spot Index remained stable
- Euro at US$1.0822, little changed
- Yen rose 0.1% to 153.17 per dollar
- Offshore yuan was little changed at 7.1436 per dollar
- Australian dollar remained stable at US$0.6559
Cryptocurrency Updates:
- Bitcoin steady at US$72,305.34
- Ether up 0.2% to US$2,625.42
Bonds:
- 10-year US Treasuries yield declined 1 basis point to 4.24%
- Australia’s 10-year yield remained steady at 4.44%
Commodities:
- West Texas Intermediate crude up 0.3% to US$67.39 a barrel
- Gold rose 0.1% to US$2,777.79 an ounce
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