Asian Stocks Set To Climb On Year-End Rally Hopes: Markets Wrap
Focus in Asia will be on China’s one and five-year loan prime rates later today.
Asian equity markets were poised for a positive open, tracking Friday’s gains in US stocks that intensified bets for a strong finish to the year.
US futures and shares in Australia opened higher on Monday, with contracts on Hong Kong and Japanese stock benchmarks also pointing to gains for those markets though moves may be exaggerated by thinned trading. Bitcoin rose while silver climbed to another record.
Hopes for a year-end rally have grown as dip buyers late last week helped equities recover from a slide driven by doubts over AI exuberance and the scope for Federal Reserve easing. US stocks jumped 0.9% on Friday in a second day of gains, wiping out the week’s loss as volumes spiked during a quarterly options and futures expiry, and as traders positioned for a rally into 2026.
“We’re now likely to see markets continue higher, starting with Asia,” said Tony Sycamore, an analyst at IG in Sydney. “The one big elephant in the room remains the valuations in AI and where we go from here.”
Focus in Asia will be on China’s one and five-year loan prime rates later today. Commercial banks are likely to keep lending rates unchanged for a seventh month as expectations grow that the People’s Bank of China may ease policy next year.
“A weaker economy heading into the fourth quarter has raised the urgency for more support to prevent a sharper slowdown, with year-end policy meetings hinting slightly more monetary easing in 2026,” said Eric Zhu from Bloomberg Economics. “We see the next rate cut early next year, guiding lending rates lower.”
Crude prices will also be watched, with the US still in pursuit of a third oil tanker near Venezuela as President Donald Trump intensifies an oil blockade on Nicolás Maduro’s government.
Elsewhere, UK and US growth readings are due this week, as well as minutes from the Reserve Bank of Australia’s December policy meeting which may give clues to whether it could hike in February. In Japan, Tokyo inflation as well as national jobs data are due, helping traders assess the outlook for Bank of Japan policy after its cautious hike last week.
Treasury yields edged higher on Friday as New York Fed President John Williams signaled no urgency to cut interest rates again citing recent employment and inflation data. Cleveland Fed President Beth Hammack echoed that sentiment in an interview with the Wall Street Journal, reinforcing expectations for a pause after a string of recent reductions.
While the slew of economic data last week did little to provide clarity on the outlook for US interest rates, traders continue to bet on two rate cuts in 2026.
“We think inflation worries voiced by some hawks on the board are overdone and overall risks in the labor market are clearly to the downside,” Citigroup Inc. strategists including Adam Pickett wrote in a note to clients. But with only one clean set of data to be published prior to next month’s meeting, “this makes current market pricing of a 30% probability of cut in January look fair,” they wrote.
Corporate News
A group of private equity firms led by Permira and Warburg Pincus has agreed to acquire Clearwater Analytics Holdings Inc. in a deal valuing the investment and accounting software maker at $8.4 billion including debt.
Chinese chipmakers are rushing to the IPO market, raising funds that are key to the nation’s goal of technological self-reliance and winning the global race on artificial intelligence.
Seven & i Holdings Co.’s chief executive is pressing its US convenience-stores business to deliver a faster turnaround as the retailer seeks a public listing of the unit to fund new investment and lift shareholder returns.
Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.2% as of 8:31 a.m. Tokyo time
Hang Seng futures rose 0.5%
Australia’s S&P/ASX 200 rose 0.5%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.1713
The Japanese yen was little changed at 157.63 per dollar
The offshore yuan was little changed at 7.0352 per dollar
The Australian dollar was little changed at $0.6610
Cryptocurrencies
Bitcoin rose 0.3% to $88,384.21
Ether rose 0.7% to $2,993.13
Bonds
Australia’s 10-year yield advanced two basis points to 4.77%
Commodities
West Texas Intermediate crude rose 0.7% to $56.89 a barrel
Spot gold rose 0.3% to $4,350.10 an ounce
