*

CME's FedWatch Tool shows 80.9% chance of December rate

cut

*

Asian currencies see marginal appreciation on U.S. rate

outlook

*

Fed's Waller cites weak labour market for rate-cut support

(.)

By Sneha Kumar

Nov 25 (Reuters) - Most emerging market equities

advanced on Tuesday, led by South Korea and Taiwan stocks, as

several U.S. Federal Reserve officials signalled support for a

potential interest rate cut in December, raising market bets of

upcoming monetary easing.

The MSCI Emerging Asia Index climbed 0.9%,

extending its advance for a second session. Seoul's benchmark

edged 0.1% higher, while Taiwan's and Thailand's

benchmark indexes each gained 1.1%.

Asian market momentum has strengthened over the past two

days as U.S. Fed officials voiced backing for policy easing next

month. Fed Governor Christopher Waller said the current soft

labour market warrants another quarter-point rate cut in

December.

Lower borrowing costs in the world's largest economy

typically benefit open emerging-Asian economies, giving their

central banks more room to reduce domestic interest rates.

"If the Fed does cut in December, it would symbolically

support the relative ease towards the market's perceived

terminal Fed funds rate of 3%," said Chris Weston, head of

research at Pepperstone.

"Holding rates steady in December, at a time when the labour

market is fragile and both short- and long-term U.S. inflation

expectations are falling, would be a disconnect that likely

wouldn't sit well with the market."

Markets are pricing in an 80.9% chance of a reduction of 25

basis points at the December meeting, according to CME's

FedWatch Tool, up from 42.4% last week. U.S central bank

officials are scheduled to meet on December 9 and 10.

In Southeast Asia, stocks in Jakarta slipped nearly

1% from their record-high levels touched on Monday. The

benchmark index in the Philippines rose as much as 0.7%

to its highest level since late-October.

Late on Monday, Bangko Sentral ng Pilipinas' governor Eli

Remolona, Jr said that inflation expectations in the country

were "more or less anchored" and he was pleased that consumer

price increases has averaged below their target level over the

year.

Singapore's benchmark index fell 0.4%, following a

surprise uptick in the city-state's core inflation for October.

Following the data release, Bank of America analysts now

expect the Monetary Authority of Singapore to start

normalisation as early as April instead of October 2026.

Asian currencies posted marginal gains, with the Malaysian

ringgit and Indonesian rupiah up about 0.2% each,

while the Philippine peso, Singapore dollar and

Thai baht were little changed.

HIGHLIGHTS:

** Thai October exports rise 5.7% y/y, below forecast

** Severe floods displace thousands in Thailand and Malaysia, at

least 8 killed

** 'Return' to China not an option for Taiwan's people, premier

says responding to Xi

Asian

stocks

and

currenci

es at

0418 GMT

COUNTRY FX RIC FX FX YTD INDEX STOCKS STOCKS

DAILY % % DAILY YTD %

%

Japan +0.04 +0.22 -0.03 21.85

China India +0.11 -3.95 0.04 9.83

Indonesi +0.13 -3.47 -0.90 19.96

a

Malaysia +0.17 +8.13 -0.23 -1.66

Philippi +0.01 -1.36 -0.02 -7.79

nes

S.Korea Singapor -0.01 +4.63 -0.42 18.22

e

Taiwan -0.05 +4.19 1.12 16.35

Thailand -0.02 +5.98 1.08 -9.57