Asia-Pacific markets experienced a rally on Wednesday, driven by a better-than-expected US inflation report that eased concerns about the Federal Reserve's monetary policy. The Producer Price Index (PPI), a gauge of wholesale inflation, increased by a modest 0.2% in December, falling short of economists' projections. This positive news also influenced Wall Street, with major benchmarks closing higher. The report suggests that inflation may be cooling, potentially paving the way for a less aggressive stance from the Federal Reserve. Meanwhile, economic indicators from South Korea and other Asian nations provide insights into regional growth and employment trends.
Asia-Pacific markets experienced a surge on Wednesday, fueled by a softer-than-anticipated inflation report from the United States that propelled two key Wall Street benchmarks higher overnight. The Producer Price Index ( PPI ), a measure of wholesale inflation, increased by a mere 0.2% in December, according to the Bureau of Labor Statistics. Economists surveyed by Dow Jones had projected a 0.4% rise. Core PPI , which excludes food and energy prices, remained flat.
Business sentiment among large manufacturers witnessed a rebound, with the Tankan reading climbing to plus 2. This followed a dip into negative territory for the first time in 10 months in December, registering a reading of minus 1. Meanwhile, South Korea's Kospi index ascended by 0.95%, while the small-cap Kosdaq Index added 0.53%. South Korean authorities are making efforts to apprehend impeached President Yoon Suk Yeol for a second time. South Korea's unemployment rate reached a three-year high in December 2024, with the unemployed population swelling by 171,000 individuals or 18.1% year-on-year to 1.12 million in the final month of 2024.In other news, the portfolio manager behind a high-performing Hong Kong-listed exchange-traded fund anticipates the AI growth rally to persist into 2025. Beck Lee, Chief Investment Officer of the fund, stated that their approach relies on proprietary research that integrates macroeconomic factors with company fundamentals to select stocks. President-elect Donald Trump intends to issue a number of executive orders to bolster fossil fuels subsequent to his inauguration on Monday.Unnamed oil lobbyists disclosed that Trump is expected to issue orders to reverse President Joe Biden's limitations on offshore and federal land oil and gas drilling. Additionally, he plans to challenge tailpipe emission regulations and authorize plants exporting liquefied natural gas, according to the Journal. Goldman Sachs' John Marshall observes heightened call option buying ahead of earnings season. 'A lot of call buying. That suggests that people are positioned for short-term upside -- that tends to be a contrarian signal,' Marshall stated. Call options function as bets on a stock's price increase in the short term. Marshall highlighted the consumer sector as a potential source of volatility, building upon a turbulent third-quarter reporting season. 'The earnings day moves that we saw last quarter were at a 14-year high. That tells you that there's a lot of volatility in the fundamentals of these companies,' Marshall remarked. The Texas Legislature is also in focus as lawmakers grapple with various issues, including energy policy and economic development
ASIA-PACIFIC MARKETS INFLATION PPI US ECONOMY FEDERAL RESERVE SOUTH KOREA AI STOCK MARKET FOSSIL FUELS TEXAS LEGISLATURE
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