© Reuters. FILE PHOTO: A man walks in the Central Business District on a rainy day, in Beijing, China, July 12, 2023. REUTERS/Thomas Peter//File Photo
By Jamie McGeever
(Reuters) – Exciting stuff ahead in Asian markets!
Investors in Asia are approaching Thursday’s trading session with caution after a late slide on Wall Street took some shine off figures that earlier showed global inflationary pressures cooling further.
Thursday’s highlights in the regional economy include the Indonesian central bank’s latest policy decision, consumer price inflation and trade figures from Hong Kong, and producer price inflation data from South Korea.
A sudden decline in UK inflation last month hammered gilt yields on Wednesday, sparking a growing view that major central banks have substantial room to cut interest rates next year.
The global risk rally hit a speed bump as the Wall Street session came to a close. Will the negativity spill over into Asia on Thursday?
The Shanghai blue chip CSI 300 index is feeling the heat, falling more than 1% on Wednesday. Things are shaping up for its worst weekly run in 12 years and a record fifth consecutive monthly loss.
The big picture is challenging – deflation is taking hold, the huge property sector is imploding, and the growth outlook is questionable at best.
It’s a different story in Hong Kong, where consumer price inflation has been rising, reaching a year-high of 2.7% in October. Consistent with this trend, figures on Thursday are expected to show that annual inflation held steady at 2.7% in November.
Bank Indonesia is expected to keep its benchmark seven-day reverse repo rate steady at 6.00% for a second month. Economists polled are predicting the first rate cut to be in the third quarter of 2024.
