Emerging Markets Are Rising: Hopes for Interest Rate Cuts

As Asian Markets Continue to Rise

Asian markets started the week on a positive note with fresh hopes of interest rate cuts in the U.S.. The volatile process of last week, shaken by concerns over a technology bubble, is presenting various opportunities for investors.

Throughout the year, significant investments in artificial intelligence (AI) have boosted stocks. Last month, chip giant Nvidia reached a market valuation of $5 trillion, setting an important record.

However, investors have begun to worry that the large investments in this sector may be excessive and that it could take time to realize profits. This has led to warnings of a potential market correction.

Moreover, in recent weeks, the Federal Reserve is not expected to cut rates again, as stubbornly high inflation overshadows weaknesses in the labor market.

Nonetheless, risk appetite strengthened last Friday after New York Fed President John Williams indicated that he sees "room for more adjustments" at the monetary policy meeting on December 9-10. This statement increased the probability of an interest rate cut from 35% to 70%, boosting investors' hopes.

This week, the producer price index is expected to be announced. This data will be one of the key figures for officials before they convene. Several other critical reports have been delayed or missed due to the government shutdown.

IG market analyst Fabien Yip stated, "The significance of the reading has increased with the postponement of the personal consumption expenditures report expected on November 26. This removes an important data point from the policymakers' assessment framework."

Yip added, "A significantly stronger PPI result could bolster concerns regarding persistent inflationary pressures and could constrain the Fed's capacity to cut rates in December."

The rise on Wall Street last Friday closed a challenging week for the market, with most of Asia standing out as Hong Kong and Seoul rose by more than 1%. Sydney, Singapore, Wellington, and Taipei also saw notable increases, while Shanghai and Manila retreated. U.S. futures also showed an increase.

Tokyo was closed for a holiday. However, while the general atmosphere was observed to be somewhat calmer compared to last week, uncertainty continues to put pressure on risky assets. Bitcoin is fluctuating around $87,000. Last month, Bitcoin rose to $126,200 but has recovered from its lowest level in seven months at $80,553.

Current Market Situation

- Hong Kong - Hang Seng Index: up 1.4% to 25,568.08
- Shanghai - Composite: down 0.1% to 3,829.71
- Tokyo - Nikkei 225: closed for holiday
- Dollar/Yen: 156.70 yen, Friday 156.39 yen
- Euro/Dollar: $1.1515, Friday $1.1519
- Pound/Dollar: $1.3096, Friday $1.3107
- Euro/Pound: 87.92 pence, Friday 87.88 pence
- West Texas Intermediate: down 0.2% to $57.93
- Brent North Sea Crude Oil: down 0.2% to $62.44
- New York - Dow: up 1.1% to 46,245.41 (closed)
- London - FTSE 100: up 0.1% to 9,539.71 (closed)