SYDNEY (Reuters) -Asian shares rallied on Monday after a benign reading on U.S. inflation restored some hope for further policy easing next year, while there was relief that Washington had averted a government shutdown.
After the bonanza of recent central bank decisions, this week is much quieter with only the minutes of a few of those meetings due. There are no Federal Reserve speeches and U.S. data is of secondary importance.
Otherwise the themes were largely the same, with the dollar underpinned by a relatively strong economy and higher bond yields, which in turn is a burden for commodities and gold.
It is also a headache for emerging market countries, which are having to intervene to stop their currencies from falling too far and stoking domestic inflation.
For now, the afterglow from the U.S. inflation report was enough to lift MSCI’s broadest index of Asia-Pacific shares outside Japan by 0.3%.
gained 1.2%, while the automaker index climbed 1.3% helped by signs of progress in a potential merger between Honda (NYSE:) and Nissan (OTC:).
South Korean shares climbed 1.3%, while Taiwan’s market bounced 2.6%.
Chinese blue chips rose 0.7%, as 10-year bonds yields hit a fresh record low of 1.665% despite efforts by the central bank to stop the relentless decline.
EUROSTOXX 50 futures dipped 0.2%, while and were near flat.
added 0.4%, while Nasdaq futures firmed 0.6%. The fell almost 2% last week and the Nasdaq 1.8%, though the latter is still up 30% for the year.
Analysts at BofA noted the S&P 500 was up 23% for the year, but if the 12 largest companies were excluded the gain was only 8%. They cautioned such extreme concentration was a vulnerability going into 2025.
Wall Street had ral