BENGALURU: Most emerging Asian equities opened December stronger on Monday, buoyed by increasing wagers on a US rate cut next week, while the Thai baht advanced to a more than two-month peak amid muted regional currency moves.
Malaysian shares rose 1.1 percent after a 0.8 percent decline on Friday, while Singapore stocks rose as much as 0.5 percent to a near two-week high and Thailand shares climbed 1.3 percent.
Traders are now pricing in nearly a 90 percent chance that the Federal Reserve would cut rates by 25 basis points when it meets next week, according to the CME FedWatch tool. The bets have increased in recent weeks following softer US labour data and supporting comments by Federal Reserve officials including Governor Christopher Waller, who said that the weak job market warranted another quarter-point rate cut in December.
The US central bank is due to meet on December 9 and 10, with markets eyeing Chair Jerome Powell’s post-meeting comments next Wednesday.
“If the tone is even uncertain or a bit more hawkish, then we might see a bit of an increase in volatility, and we might also see the markets pull back a bit across Asia,” said Isaac Lim, chief markets strategist at online trading platform Moomoo.
Philippine stocks surged 1.5 percent to hit their highest since late October before reversing course after a senior government official warned that the country’s economic growth this year would likely fall short of the government’s target.
The benchmark is heading for a yearly loss of 8.3 percent, cementing its place among Asia’s laggards.
Among currencies, the Thai baht rose as much as 0.6 percent to 31.993 per US dollar, its strongest level in more than two months. Lim said the unit could firm further towards the 31.80 support level in the coming days.