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Asia stocks hover near highest since February 2021

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Dollar firms after hawkish tilt from some Fed policymakers

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Earnings focus now to be on tech firms

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Japan closes for holiday, trading in Asia likely to be

muted

By Ankur Banerjee

SINGAPORE, Nov 3 (Reuters) - Asian stocks rose on Monday

as investors weighed last week's megacap earnings showing

significant spending on artificial intelligence, while the

dollar held near a three-month high after hawkish comments from

Federal Reserve policymakers.

Gold prices fell, edging further away from the record peak

it has been at most of last month, while oil prices rose after

OPEC+ decided to hold off production hikes in the first quarter

of next year, easing fears of a supply glut.

Investors are still focused on developments from last week,

including central bank meetings and the U.S.-China agreement on

a year-long trade truce that was within broad expectations. But

doubts remain if the truce will last for the full duration.

MSCI's broadest index of Asia-Pacific shares outside Japan

was 0.2% higher at 726.98, hovering near the

4-1/2-year high it touched last week. The index is up more than

27% this year, on course for its best year since 2017.

Japan markets are closed for a holiday with no cash

Treasuries trading, resulting in muted activity during Asian

hours.

HAWKISH FEDSPEAK

A clutch of Federal Reserve bank presidents on Friday aired

their discomfort with the U.S. central bank's decision to cut

interest rates, even as influential Fed Governor Christopher

Waller made the case for more policy easing to shore up a

weakening labour market.

Following the October monetary policy meeting last week, Fed

Chair Jerome Powell said an interest rate cut at the next

meeting in December was "not a foregone conclusion." Investors

had expected that move to be almost a done deal.

"We continue to think that the motivation for the rate cuts

is consistent with our premise for further dollar downside: the

U.S. economy will not outperform to the same degree as it did

before," said Goldman Sachs strategists in a note.

"That will lead to a weaker dollar over time given its

strong starting point."

Traders are now pricing a 68% chance of a rate cut in

December, down from a near certainty last week before the Fed

meeting, where the central bank lowered rates by 25 basis points

as expected.

That has left the dollar firmer. The euro last bought

$1.1524 at a three-month low. Sterling eased 0.27% to

$1.3134, while the yen was at 154.175 per U.S. dollar,

near its lowest since mid-February.

With the U.S. government shutdown set to extend this week,

there will be no data for job openings as well as nonfarm

payrolls.

The U.S. shutdown, which started on October 1, is now the

second-longest ever behind the 2018-2019 shutdown that lasted 35

days.

"The focus will be on the ADP employment report and the

employment component within the ISM PMIs to assess the health of

the U.S. labour market," said Tony Sycamore, market analyst at

IG.

SPOTLIGHT STILL ON EARNINGS SEASON

After a mixed bag of earnings from the megacap companies

that showed investors were keen to see a return on the extensive

capital spending on AI infrastructure, focus will be on tech

firms reporting this week.

Enthusiasm over AI has helped drive global stock markets but

investors are wary of potential overexuberance tied to the theme

and eager for evidence that AI investments are paying off.

Semiconductor firms Advanced Micro Devices ( AMD ), Qualcomm ( QCOM )

and data analytics company Palantir Technologies ( PLTR )

are due to report. Other companies set to report next

week include McDonald's and Uber ( UBER ).

In commodities, gold was 0.4% lower at $3,985.35 per

ounce. Brent crude futures rose 0.49% to $65.10 a

barrel, while U.S. West Texas Intermediate crude was at

$61.33 a barrel, up 0.61%.