Asian stocks slipped to three-week lows as investors tempered expectations for cuts to U.S. interest rates.
Hong Kong's Hang Seng index and China's CSI 300 index hit fresh four-year lows.
South Korea's inflation rate in November fell to 3.3%, lower than expected.
The European Central Bank's most-hawkish officials said inflation is showing a 'remarkable' slowdown.
The Reserve Bank of Australia held its benchmark policy rate at 4.35%.
Asian-Pacific markets experienced a downturn, with South Korea's inflation rate in November falling to 3.3%, lower than expected, and Japan's Tokyo inflation rate coming in at 2.6%, the lowest since July 2022. Hong Kong's Hang Seng index and China's CSI 300 index hit fresh four-year lows, while India's service sector activity expanded slower than expected in November. The Reserve Bank of Australia held its benchmark policy rate at 4.35%.
In Hong Kong, private sector activity expanded for the first time since June, and the Caixin China services PMI climbed to its highest since August. However, Japan's business activity contracted for the first time this year. Oil prices continued to fall despite OPEC+ cuts.
In Europe, the European Central Bank's most-hawkish officials said inflation is showing a 'remarkable' slowdown. Markets have now fully priced six quarter-point rate cuts by the European Central Bank in 2024 for the first time, a move that would take the key rate down 150 basis points to 2.5%. There's also an almost 90% chance of the easing cycle starting in the first quarter of next year, a scenario that was barely contemplated just three weeks ago.
In the US, Asian stocks slipped to three-week lows as investors tempered expectations for cuts to U.S. interest rates and waited on U.S. jobs data. The Australian dollar fell after the central bank left interest rates on hold. Gold remained above $2,000 after hitting a record high. U.S. job openings data is due later today. The dollar rose slightly overnight, and Brent crude futures traded broadly steady at $78.31 a barrel.
The European Central Bank's most-hawkish officials Tuesday said inflation is showing a 'remarkable' slowdown.
Markets have now fully priced six quarter-point rate cuts by the European Central Bank in 2024 for the first time, a move that would take the key rate down 150 basis points to 2.5%.
There's also an almost 90% chance of the easing cycle starting in the first quarter of next year, a scenario that was barely contemplated just three weeks ago.
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