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Fed Rate Cut Looms: Asian Markets Tense
9 Dec
Summary
- Asian stocks fell ahead of the Federal Reserve's expected rate decision.
- Traders are anxious about the Fed's future easing pace due to mixed economic signals.
- China plans to strengthen domestic demand with looser fiscal and monetary policies.
Asian stock markets experienced a downturn on Tuesday, primarily influenced by anticipation surrounding the U.S. Federal Reserve's upcoming interest-rate decision. The central bank is widely expected to implement a 25 basis-point rate cut on Wednesday, though underlying divisions within the committee contribute to market apprehension.
Traders are closely monitoring the Federal Reserve's future easing trajectory. Conflicting economic indicators, including a cooling job market juxtaposed with persistent inflation and data gaps due to a government shutdown, are fueling this uncertainty. The U.S. dollar faced pressure in Asian trade, while gold prices held steady below $4,200 per ounce and oil prices remained stable after prior declines.
In China, the Shanghai Composite index closed down 0.37 percent following the Politburo's announcement of plans to boost domestic demand by 2026 through more proactive fiscal and appropriately loose monetary policies. Hong Kong's Hang Seng index suffered a more significant drop of 1.29 percent, heavily impacted by a decline in technology stocks.
