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GLOBAL MARKETS-Asian shares set for first weekly loss in five, China stimulus eyed
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GLOBAL MARKETS-Asian shares set for first weekly loss in five, China stimulus eyed
Oct 10, 2024 11:53 PM

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.

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