Asian stocks track US gains as rate-cut bets grow

“Many of November’s fears about AI and a cratering job market have ended up not coming to fruition,” said David Laut, chief investment officer at Kerux Financial. “That suggests that we are seeing a traditional market pullback in recent weeks and not the start of a deeper correction.”

Waller’s remarks echoed those of other Fed officials, including San Francisco Fed President Mary Daly, who also voiced support for a December rate cut in a Monday interview. New York Fed President John Williams similarly moved markets on Friday by noting that a near-term cut remains on the table.

There has also been no effort by the Fed leadership to “clarify” market interpretation of Williams’ comments Friday, Evercore ISI’s Krishna Guha and Marco Casiraghi wrote in a note published on Monday.

“They were likely approved by Powell and signal the leadership expects to push through a December rate cut,” they wrote.

Treasuries held their gains Tuesday after yields on the benchmark 10-year declined four basis points to 4.02% in the prior session. Money markets are now pricing in a roughly 90% chance of a cut at the Fed’s upcoming December meeting, following weeks of shifting expectations.

Gold fluctuated following a 1.8% jump in the prior session. Lower rates typically make non-yielding bullion more appealing to investors.

In other corners of the market, Bitcoin continued its volatile trading, edging lower after gains in the previous two sessions. Oil steadied as investors tracked a risk-on mood in wider financial markets, which countered the impact of progress in peace talks over Ukraine that could pave the way for increased crude supplies.

Ahead of Thanksgiving and Black Friday, Tuesday will bring new data for investors to assess the health of the US economy. September retail figures are expected to show a moderation as consumers remain squeezed by high prices. Dell Technologies Inc. and HP Inc. are due to report earnings, while in Asia Alibaba Group Holding Ltd. will release results.

Other data due this week include the producer price index and durable goods orders for September.

Jobless claims on Wednesday, covering the November survey week, will take on added importance as the Fed leans on alternative indicators in the absence of payroll figures.

“There are increasing signs that the economy remains sluggish, which will put additional emphasis on the retail sales release this week, although once more the data will be slightly historic,” said Richard Hunter, head of markets at Interactive Investor. “There will be some hopes that the recently guarded sentiment will at least temporarily be erased.”