The Asia-Pacific stock markets exhibited mixed movements at the opening of trading today (12/3/2024). This occurred amidst a wait-and-see attitude among market participants regarding the upcoming release of US inflation data.
As of 08:30 WIB, the Shanghai Composite Index in China was observed to weaken slightly in the morning, down by 0.21%. Similarly, Japan's Nikkei 225 Index declined by 1.4%.
In contrast, Hong Kong's Hang Seng Index experienced an appreciation of 0.18%, while Singapore's Straits Times Index strengthened by 0.26%.
Currently, investors are adopting a wait-and-see approach regarding the US inflation and core inflation data to be released tonight.
It is worth noting that the US inflation rate on a year-on-year basis (yoy) is expected to remain unchanged at 3.1% according to consensus. Meanwhile, core inflation is forecasted to ease slightly to 3.7% yoy for the February 2024 period.
Inflation is expected to remain steady compared to January 2024 as the increase in gasoline prices is likely to dampen inflation in February, potentially reinforcing the US Federal Reserve's (The Fed) decision to take a more gradual approach by lowering interest rates.
Economists anticipate that prices for various goods and services will rise by 0.4% in that month, slightly ahead of the 0.3% increase in January, according to Dow Jones consensus. Excluding food and energy, the increase in core inflation is projected to be 0.3%, also a tenth of a percentage point higher than the previous month.
"While we do not anticipate inflation trends to pick up again this year, unclear progress in the coming months is likely to make The Fed increasingly confident that inflation will return to its target sustainably," said Sarah House, senior economist at Wells Fargo.
As of now, the FedWatch Tool survey indicates that The Fed's interest rates will be maintained at the level of 5.25-5.5% at the March and May 2024 meetings.
Meanwhile, the potential for the first rate cut is expected to occur in June 2024 by 25 basis points (bps) at 55.2% to become 5.5-5.25%.