Asian markets climb on US rate hopes
ASIAN markets climbed yesterday as mixed readings on the US economy and comments from a top Federal Reserve official tempered expectations about the Fed’s longterm plans for raising interest rates.
The gains came despite a negative lead from New York and Europe where traders are awaiting key events this week, including Chinese growth data, the last presidential debate and a European Central Bank policy meeting.
“On a longer-term basis, we do think that the Federal Reserve is likely to be behind the curve where hiking rates is concerned,” Kelvin Tay, regional chief investment officer at UBS Group’s wealth management business in Singapore, told Bloomberg Television.
He added that this meant the dollar was likely at its peak.
Regional stock markets rallied on the prospect of rates staying low for longer. Tokyo ended 0.4 percent higher as the dollar pared early losses against the yen.
Hong Kong ended 1.6pc higher and Shanghai closed up 1.4pc.
Sydney gained 0.4pc and Seoul put on 0.6pc, while Singapore was up 0.1pc. Taipei and Manila also recorded healthy gains.
“We’re likely to see some choppy trading until we get some of these risk events out of the way, such as the last US presidential debate,” James Woods, an analyst at Rivkin Securities in Sydney, told Bloomberg News. ”Momentum seems to be building up for a December rate hike by the Fed.”
Attention turns to the release today of Chinese third-quarter economic growth figures, with an AFP survey predicting a slowdown from the previous three months.
The figures will be closely watched after last week’s disappointing China trade results were tempered by a better-than-expected inflation reading.
The growth figures will be followed by the third US debate in a bitter presidential election campaign, while the ECB holds a policy meeting tomorrow. –