*
CME's FedWatch Tool shows 80.9% chance of December rate
cut
*
Asian currencies see marginal appreciation on U.S. rate
outlook
*
Fed's Waller cites weak labour market for rate-cut support
(.)
By Sneha Kumar
Nov 25 (Reuters) - Most emerging market equities
advanced on Tuesday, led by South Korea and Taiwan stocks, as
several U.S. Federal Reserve officials signalled support for a
potential interest rate cut in December, raising market bets of
upcoming monetary easing.
The MSCI Emerging Asia Index climbed 0.9%,
extending its advance for a second session. Seoul's benchmark
edged 0.1% higher, while Taiwan's and Thailand's
benchmark indexes each gained 1.1%.
Asian market momentum has strengthened over the past two
days as U.S. Fed officials voiced backing for policy easing next
month. Fed Governor Christopher Waller said the current soft
labour market warrants another quarter-point rate cut in
December.
Lower borrowing costs in the world's largest economy
typically benefit open emerging-Asian economies, giving their
central banks more room to reduce domestic interest rates.
"If the Fed does cut in December, it would symbolically
support the relative ease towards the market's perceived
terminal Fed funds rate of 3%," said Chris Weston, head of
research at Pepperstone.
"Holding rates steady in December, at a time when the labour
market is fragile and both short- and long-term U.S. inflation
expectations are falling, would be a disconnect that likely
wouldn't sit well with the market."
Markets are pricing in an 80.9% chance of a reduction of 25
basis points at the December meeting, according to CME's
FedWatch Tool, up from 42.4% last week. U.S central bank
officials are scheduled to meet on December 9 and 10.
In Southeast Asia, stocks in Jakarta slipped nearly
1% from their record-high levels touched on Monday. The
benchmark index in the Philippines rose as much as 0.7%
to its highest level since late-October.
Late on Monday, Bangko Sentral ng Pilipinas' governor Eli
Remolona, Jr said that inflation expectations in the country
were "more or less anchored" and he was pleased that consumer
price increases has averaged below their target level over the
year.
Singapore's benchmark index fell 0.4%, following a
surprise uptick in the city-state's core inflation for October.
Following the data release, Bank of America analysts now
expect the Monetary Authority of Singapore to start
normalisation as early as April instead of October 2026.
Asian currencies posted marginal gains, with the Malaysian
ringgit and Indonesian rupiah up about 0.2% each,
while the Philippine peso, Singapore dollar and
Thai baht were little changed.
HIGHLIGHTS:
** Thai October exports rise 5.7% y/y, below forecast
** Severe floods displace thousands in Thailand and Malaysia, at
least 8 killed
** 'Return' to China not an option for Taiwan's people, premier
says responding to Xi
Asian
stocks
and
currenci
es at
0418 GMT
COUNTRY FX RIC FX FX YTD INDEX STOCKS STOCKS
DAILY % % DAILY YTD %
%
Japan +0.04 +0.22 -0.03 21.85
China India +0.11 -3.95 0.04 9.83
Indonesi +0.13 -3.47 -0.90 19.96
a
Malaysia +0.17 +8.13 -0.23 -1.66
Philippi +0.01 -1.36 -0.02 -7.79
nes
S.Korea Singapor -0.01 +4.63 -0.42 18.22
e
Taiwan -0.05 +4.19 1.12 16.35
Thailand -0.02 +5.98 1.08 -9.57
(Reporting by Sneha Kumar in Bengaluru; Editing by Sherry
Jacob-Phillips)
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