Asian stock markets generally opened lower on Monday (11/18), affected by the possibility that the Federal Reserve (FED) will slow down interest rate cuts and that Trump's policies may increase inflation. Japanese and Australian shares fell, while South Korea bucked the trend as Samsung announced a share buyback.
Asian stocks weaken, FED may delay rate cut
Asian stocks opened broadly lower, with Japan and Australia suffering the most sharp declines, while South Korean stocks bucked the trend and rose on Samsung's $7.2 billion share buyback plan, Bloomberg reported.
With the U.S. consumer price index rising 2.6% year-on-year in October, last month's 2.4% was a little higher, but still within a reasonable range. The monthly growth rate was 0.2%, which was similar to the previous months. Prices were still rising steadily. However, the market is still worried that the Federal Reserve (FED) may suspend interest rate cuts in December.
Although FED Chairman Powell has previously indicated that he has no intention of cutting interest rates in the short term, some scholars point out that the FED may still cut interest rates before the end of the year, but the chance is now lower. In particular, Trump’s new round of tax reform and tariff policies may push up inflation in the next few years and further delay the FED’s implementation of interest rate cuts.
(The Fed Chairman’s hawkish remarks cooled the cryptocurrency market, and Bitcoin fell 2%)
Dollar falls slightly as oil prices weaken on falling demand from China
The U.S. dollar fell slightly on Monday but remained strong after seven consecutive weeks of gains. Asian stocks fell nearly 4% in a week last week, their worst performance in nearly half a year, amid a combination of a strong U.S. economy, a strong dollar and worries about China's economy.
In addition, oil prices continue to weaken, mainly affected by declining demand in China and oversupply in the market. Regarding the international situation, Ukrainian President Volodymyr Zelenskiy is facing pressure from allies to seek an end to the war with Russia. The United States is also considering whether to relax restrictions on the use of Western weapons in Ukraine, but this may trigger an increase in conflict with Russia.
Bank of Japan remains open to raising interest rates, China and Indonesia focus on economy and currency
Bank of Japan Governor Kazuo Ueda said that the economy and prices will be key factors in determining the timing of the next policy adjustment, and he is open to the timing of the next interest rate hike. Some experts believe that the Japanese yen may still be under "depreciation" pressure against the US dollar in the short term, but if the exchange rate is close to 160 (154 at the time of writing), the market may be more worried that the government will intervene to stabilize the exchange rate.
On the other hand, the Bank of China is expected to keep the loan prime rate (LPR) unchanged this week, focusing on internal economic stability. The Bank of Indonesia may take stabilization measures in response to the Indonesian rupiah approaching the market concern threshold of 16,000, focusing on exchange rate stability to prevent external risks.
British and European inflation data and NVIDIA financial report are key, market uncertainty intensifies
This week's inflation data from the UK and the EU are also the focus of market observation, with investors hoping to judge the future policy direction of the Bank of England and the European Central Bank. At the same time, NVIDIA's financial report to be announced on 11/22 Taiwan time has also become the key to testing whether the craze for AI concept stocks can continue. The global market is currently facing increasing inflationary pressure and policy uncertainty, especially the possible impact of Trump's policies. Investors need to actively pay attention to international policies and economic developments and invest cautiously.
This article Asian stocks weaken: The impact of Trump’s policies and FED movements increase uncertainty, and NVIDIA’s earnings announcement affects the AI craze. First appeared on Chain News ABMedia.