The Asia-Pacific stock markets exhibited varied movements at the close of trading today (12/3/2024). This occurred amid a wait-and-see attitude among market participants regarding the release of US inflation data tonight.
As of 4:00 PM WIB, the Shanghai Composite Index of China was observed to decline by 0.41% in today's session, while Japan's Nikkei 225 Index fell by 0.06%.
In contrast, Hong Kong's Hang Seng Index experienced an appreciation of 3.05%, while Singapore's Straits Times Index strengthened by 0.13%.
Currently, investors are adopting a wait-and-see approach regarding the US inflation and core inflation data to be released tonight.
It is expected that the US annual inflation rate (year on year/yoy) will remain unchanged at 3.1%. Meanwhile, core inflation is forecasted to slightly ease to 3.7% yoy for the February 2024 period.
The inflation is projected to remain the same as in January 2024 due to the potential impact of rising gasoline prices, which may suppress inflation in February, and could strengthen the US Federal Reserve's (The Fed) decision to take a slower approach by lowering interest rates.
Economists anticipate that prices of various goods and services will increase by 0.4% in the month, right ahead of the 0.3% increase in January, according to the Dow Jones consensus. Excluding food and energy, the increase in core inflation is estimated at 0.3%, also one-tenth of a percentage point higher than the previous month.
"Although we do not expect the inflation trend to pick up again this year, the unclear progress in the coming months may further convince The Fed 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 are expected to be maintained at the level of 5.25-5.5% at the March and May 2024 meetings.
However, the potential for the first rate cut may occur in June 2024 by 25 basis points (bps) at 55.2%, reducing the rate to 5.5-5.25%.
Nevertheless, this scenario might be challenging to materialize if inflation proves to be stubborn again and could have implications for central banks in other countries.