December 17, 2024 (MLN): Asian stocks moved up slightly, and the dollar remained strong on Tuesday as investors prepared for several central bank meetings this week, as Reuters reported.

The U.S. Federal Reserve is expected to announce a rate cut, while the Bank of Japan will likely keep its current policy unchanged.

Bitcoin, the largest and most well-known cryptocurrency, stayed close to its record high of $107,821 reached on Monday. It was last trading steady at $106,041.

The crypto market has been on a tear since the U.S. election in early November as traders wager the incoming Trump administration will usher in a friendlier regulatory environment. Bitcoin is up 150% in 2024.

In stock markets, the Australian market was 0.75% higher, with Japan's Nikkei up 0.26% and tech-heavy Taiwan stocks rising 0.5%.

That left MSCI's broadest index of Asia-Pacific shares outside Japan up 0.18%. The index is set for a 10% gain for the year, its strongest yearly performance since 2020.

Data on Monday showed China's consumption slowed more than expected in November, pushing stocks lower. 

On Tuesday, Hong Kong's Hang Seng Index fell 0.4%, while mainland stocks eased 0.13% in early trading.

More stimulus measures are desperately needed," said Tony Sycamore, market analyst at IG, noting that China's housing market remains fragile despite recent policy support.

"However, those measures are unlikely to come until after the details of U.S. tariffs in China are revealed early next year," Sycamore said.

Over in South Korea, the Kospi was down 0.57%, taking its yearly losses to about 7%, making it Asia's worst-performing market this year.

The market has been under pressure amid political turmoil in the country with President Yoon Suk Yeol impeached and suspended from his duties on Saturday over his short-lived attempt to impose martial law.

On the policy front, central banks in the United States, Japan, the UK, Sweden, Norway, Indonesia, and Thailand all meet this week. 

The BOJ, the Bank of England, Norges Bank, and the Bank of Thailand are expected to stand pat, while the Riksbank is seen cutting rates.

Bank Indonesia on the other hand is expected to hike interest rates to support the rupiah, which is rooted near its lowest in four months.

The spotlight will be on the Fed and especially on the projection for next year with markets penciling in a 25-basis-point cut on Wednesday.

After the rate cut on Wednesday, markets see about a 37% chance of either one 25 bp cut or none at all through 2025, according to the CME FedWatch tool.

This is an increase from about 21% a week earlier.

Charu Chanana, chief investment strategist at Saxo, said the market will be watching for any signs of a "hawkish cut."

"This means that while the Fed is easing policy, it could signal caution about the pace of future cuts, either through the committee’s updated dot plot or via Chair Powell’s press conference."

The previous dot plot indicated four rate cuts (100 bps) for 2025, but this could be revised to just three or even two cuts as inflation risks remain elevated, Chanana said.

The dollar index, which measures the U.S. currency against six rivals, was steady at 106.77 and on course for a 5% gain for the year.

The yen last fetched 154.085 per dollar and remained on the defensive on slim chances of a hike from the BOJ this week, with a majority of economics polled by Reuters expecting the central bank to hold interest rates.

In other currencies, the euro stood at $1.05207, on course for a near 5% drop in 2024. Sterling was steady at $1.2689.

In commodities, oil prices were little changed as investors fretted about Chinese demand ahead of the Fed meeting.

U.S. West Texas Intermediate crude was down 0.23% at $70.55 a barrel, while Brent crude futures fell 0.15% to $73.82 a barrel.

Spot gold inched higher to $2,656.71 per ounce, on course for 29% rise in 2024, its strongest year since 2010.

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Posted on: 2024-12-17T10:18:31+05:00