Asian Stocks Fall Amid Uncertainty Over U.S. Interest Rates

Asian stocks experienced a significant decline on Thursday, following a drop in U.S. equities and government bonds.
This decline was triggered by strong economic data, raising doubts about the Federal Reserve’s potential rate cuts in the near future.

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Markets

Elections

Oil

Markets

Performance of Asian Stock Markets

Stock indices in Japan, Australia, and South Korea all fell, leading to a regional index decline for the second consecutive day.
Meanwhile, Chinese stocks were volatile, while Hong Kong shares rose after a report showed the first monthly growth in Chinese manufacturing data since April.
Xiao Jiaqi, an economist at Crédit Agricole, stated in an interview with Bloomberg TV:
“There is still a need for further rate cuts to boost household consumption and encourage private investment.”

Decline in U.S. Stocks and Futures

In U.S. markets, futures fell following disappointing earnings forecasts from Microsoft,
along with a decline in Meta Platforms’ shares.
The S&P 500 index dropped by 0.3%, while the Nasdaq 100 fell 0.8% on Wednesday.

U.S. Rate Cut Bets

U.S. Treasury yields remained stable in Asian trading, while Australian and New Zealand bond yields rose.
On the other hand, the global bond index reached its lowest point in nearly three months.
The strong growth of the U.S. economy in the third quarter reduced expectations for monetary easing,
as data showed accelerated household purchases and government spending, pushing the core inflation rate up by 2.2%.

Elections

Impact of U.S. Elections

As the U.S. elections approach, some experts have expressed concerns about their effect on inflation.
Daniel Yu, head of asset allocation at Yuanta Securities,
noted that a potential victory for former President Donald Trump could shift investment trends.
He added that Trump’s proposed policies, including corporate tax hikes,
could increase inflationary pressures, delaying any rate cuts.

Currency Market Volatility

The Japanese yen remained stable against the U.S. dollar at 153 yen,
ahead of the Bank of Japan’s interest rate decision.
Meanwhile, the U.S. dollar volatility index reached its highest level since December 2022,
indicating market readiness for significant currency fluctuations.

Oil

Global Markets and Oil Prices

Oil prices rose slightly on Thursday, continuing gains from the previous session,
while gold prices stabilized at around $2,787 per ounce after hitting record highs.
These movements reflect investor caution ahead of the U.S. elections.

Post-Election Outlook

Barclays analysts suggested that investors are in a “wait and see” mode ahead of the elections,
with stock market inflows remaining steady throughout October despite lower trading volumes.
Despite expectations of a Trump victory, Citi Group strategists warned that markets could see a correction following the results,
given the positive sentiment that has driven the S&P 500 to six consecutive months of gains.

Asian Stocks Fall Amid Uncertainty Over U.S. Interest Rates

Asian Stocks Fall Amid Uncertainty Over U.S. Interest Rates

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