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- England ready for Pakistan's spin assault in second Test
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- Stocks diverge, oil retreats as China disappoints markets
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- Trio wins economics Nobel for work on wealth inequality
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- Rice praises 'unbelievable' England interim boss Carsley despite uncertainty
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- Smith experiment as Test opener over, Green out of India series
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- South Korea military says 'fully ready' as drone tensions soar
- Cummins back, Marsh and Head out of Pakistan ODI series
- Shanghai stocks swing after stimulus briefing as most of Asia rises
- New Zealand's Latham promises 'no fear' as he takes charge for India Tests
- Kyrgios vows to 'shut up' doubters with December comeback
- Public hearings start into death of Brit by Russian nerve agent
- Ex-Stasi officer faces verdict over 1974 Berlin border killing
- Role of government, poverty research tipped for economics Nobel
- 'Stolen satire' feeds US election misinformation
- Rookie McCarty captures first PGA Tour title in Black Desert Championship
- Australia all-rounder Green ruled out of India Test series
- Seeing double in Nigeria's 'twins capital of the world'
- UK FM to attend EU foreign affairs talks for first time in 2 years
- Carter, Billups among 13 new Basketball Hall of Fame inductees
- Ravens rip Commanders as Lions lose NFL sacks leader in win
- Hezbollah drone strike kills four, wounds dozens at Israeli base
- China says launches military drills around Taiwan
- Stewart leads Liberty past Lynx to level WNBA Finals
- England return to winning ways in Nations League, Austria thrash Norway
- UN chief says attacks on UNIFIL 'may constitute a war crime'
- Ravens outlast Commanders while Bucs batter Saints in NFL
- Dozens hurt in Israel as Hezbollah claims drone strike
- England deserve 'world class' coach: Carsley
- Burkina Faso win to become first qualifiers for 2025 AFCON
Markets drift ahead of US inflation, but rate cut hopes build
Asian markets struggled Thursday following another tepid performance on Wall Street, with focus on the release of key US inflation data that comes as traders ramp up bets the Federal Reserve will cut interest rates next year.
Observers say signs the world's top economy is feeling the effect of long-running monetary tightening has given the bank room to take a more dovish approach to fighting inflation, which is sharply down from the four-decade highs seen in 2022.
That, combined with several Fed decision-makers indicating they are in favour of holding rates where they are, has given a much-needed shot of confidence to traders at the end of a tough year.
And the latest reports provided further optimism.
The Fed's Beige Book summary of the economy showed activity had slowed in recent weeks and the labour market continued to cool -- policymakers have said some softening in jobs would be required in order to get inflation back to their two percent target.
Gross Domestic Product expanded quicker than expected in the third quarter and consumer spending growth slowed slightly.
The readings suggest the Fed is managing to control prices while not causing too much pain for the economy.
Eyes are now on the release of the personal consumption expenditures (PCE) index -- the bank's preferred gauge of inflation -- with forecasts pointing to a further retreat. The core reading came in slightly lower than expected, data showed Tuesday.
"The Fed could find themselves in a 'sweet spot'," Jeffrey Roach at LPL Financial said.
"Inflation is trending lower, the consumer is still spending -- but at a slower pace -- and the Fed could end its rate hiking campaign without much pain inflicted on the economy."
Traders are now predicting a cut in the first half of next year.
Cleveland Fed boss Loretta Mester indicated she would be in favour of a third straight pause at the December meeting, while her Atlanta colleague Raphael Bostic said he was confident inflation was coming down.
The comments followed similar utterances from other policymakers earlier in the week, though Richmond Fed chief Thomas Barkin warned of the need to keep the option of another hike open if inflation flares again.
Bank of Singapore's Mansoor Mohi-uddin warned that the economy would likely face headwinds in 2024 but remained upbeat on the outlook for equities.
"Less fiscal stimulus, rising unemployment and falling savings are all set to hurt economic activity in 2024," he wrote.
"We forecast the US will likely suffer a mild recession next year. But with core inflation also set to fall below three percent towards its two percent target, we think the Fed will start lowering its Fed funds rate each quarter, with 25-basis-point cuts in June, September and... December.
"The Fed's easing will be measured but will benefit risk assets."
Still, markets were subdued Thursday in Asia after a largely flat day in New York.
Tokyo, Hong Kong, Singapore, Taipei and Manila dipped, while Shanghai, Sydney, Seoul, Wellington and Jakarta were in the green.
Oil dipped after rallying Wednesday on a report that OPEC and its allies were mulling additional cuts of as much as a million barrels per day.
Saudi Arabia and Russia have already imposed massive reductions this year in a bid to support prices but the latest decision has proved tough as African producers push back against the move.
The grouping will hold an online meeting later Thursday to make an announcement.
- Key figures around 0230 GMT -
Tokyo - Nikkei 225: DOWN 0.2 percent at 33,255.37 (break)
Hong Kong - Hang Seng Index: DOWN 0.2 percent at 16,957.65
Shanghai - Composite: UP 0.1 percent at 3,024.94
Dollar/yen: DOWN at 147.06 yen from 147.22 yen on Wednesday
Euro/dollar: DOWN at $1.0975 from $1.0978
Pound/dollar: DOWN at $1.2695 from $1.2698
Euro/pound: UP at 86.46 pence from 86.43 pence
West Texas Intermediate: DOWN 0.3 percent at $77.65 per barrel
Brent North Sea crude: DOWN 0.2 percent at $82.90 per barrel
New York - Dow: UP less than 0.1 percent at 35,430.42 (close)
London - FTSE 100: DOWN 0.4 percent at 7,423.46 (close)
D.Sawyer--AMWN