SYDNEY, Oct 11 (Reuters) - Asian shares were headed for
the first weekly loss in five as the stunning rally in Chinese
shares took a breather, although all eyes are on the details of
the much-anticipated fiscal stimulus from Beijing this weekend.
Overnight, data showed core U.S. consumer inflation came in
at 0.3% in September, slightly hotter than expected, which
pointed to stalling progress in the Federal Reserve's fight
against inflation. However, high weekly jobless claims figures
kept bets that the Fed remains on track to cut interest rates in
November.
MSCI's broadest index of Asia-Pacific shares outside Japan
rose a subdued 0.3% but still set for a weekly
loss of 1.7% after four straight weeks of gains. The Nikkei
, however, gained 0.6%, bringing its weekly rise to 2.6%.
Wall Street futures were up 0.1%. Investors
are watching the launch of Tesla's long-promised
robotaxi late on Thursday.
Back in Asia, South Korean shares rose 0.4% after
the Bank of Korea kicked off its easing cycle with a
quarter-point move, a decision that was widely expected.
China's blue chips fell 1% on Friday and were down
1.5% for the week. Hong Kong's Hang Seng, which is closed
for a public holiday, fell 6.5% for the week, the biggest weekly
drop in two years.
Ting Lu, chief China economist at Nomura, said markets were
"laser-focused" on the Saturday's stimulus announcement.
"As any specific numbers on the extra budget and bond quota
will require the approval of the National People's Congress or
its Standing Committee, which is highly unlikely to meet before
the briefing, the market is keen to know what else the MOF might
deliver," Lu said.
Overnight, Wall Street was slightly lower while Treasury
yields were mixed. Oil is the major mover, gaining more than 3%
overnight thanks to a spike in U.S. fuel use before Hurricane
Milton and the Middle East supply risks.
Brent futures fell 0.5% on Friday to $78.95 a
barrel, having jumped 3.7% a day earlier.
Bond yields climbed for the week as traders pared
expectations for outsized U.S. rate cuts.
Atlanta Fed Bank President Raphael Bostic on Thursday told
the Wall Street Journal that he is open to a pause next month,
although others supported more gradual rate cuts.
Two-year Treasury yields are up 2 basis points
for the week to 3.9552%, while 10-year yields
climbed 8 bps to 4.0628%.
Traders still price in an about 83% probability that the Fed
will cut rates by 25 basis points next month and a 17% chance it
would leave rates unchanged, according to CME's FedWatch.
"We think the FOMC remains on track to continue its level
adjustment in policy rates with a 25bp cut in November. But our
forecast for further easing in December is now being challenged
by firm growth and inflation readings," said analysts at
JPMorgan.
Currency market movements were subdued on Friday. The U.S.
dollar is set for the second straight week of gains,
hovering near a two-month top against major peers.
The euro lost 0.4% this week to $1.0934,
undermined by expectations that the European Central Bank is
almost certain to lower rates in both October and December.
Gold was last up 0.15% at $2,633.31 an ounce, holding
ground above the key $2,600 level.