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Traders ramp up bets of December Fed easing, pricing in

57%

chance of 25-bp cut

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Stocks rebound, dollar steady

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Eyes on sliding yen as markets alert to intervention risk

By Rae Wee

SINGAPORE, Nov 24 (Reuters) - Global stocks began an

event-filled week on the front foot on Monday, as investors took

heart from growing expectations of a Federal Reserve rate cut in

December even as policymakers remain divided over such a move.

Markets were gearing up for potential catalysts, including

the release of U.S. retail sales and producer prices data due

later in the week, while British finance minister Rachel Reeves

is also set to unveil her highly anticipated budget.

Geopolitical developments were also front and centre of

trading rooms, after the United States and Ukraine said they had

created an "updated and refined peace framework" to end the war

with Russia, keeping pressure on oil prices on hopes of a

potential supply boost.

After a rough ride for global equity markets last week

driven in part by worries over lofty tech valuations, Monday's

session in Asia gave stocks some much-needed reprieve.

Trading was thinned with Japan markets closed for a holiday,

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

rose 0.4% and South Korea's tech-heavy Kospi

index was up 0.7%.

Nasdaq futures and S&P 500 futures rose 0.64%

and 0.45%, respectively, while EUROSTOXX 50 futures

advanced 0.78%.

The latest boost came after remarks from influential Fed

policymaker John Williams, who said on Friday that interest

rates can fall "in the near term", boosting the likelihood of

further easing in December.

"We expect another Fed cut in December, followed by two more

moves in March and June 2026 that take the funds rate to

3-3.25%," said Goldman Sachs chief economist Jan Hatzius in a

note.

"The risks for next year are tilted toward more cuts, as the

news on underlying inflation has been favourable and the

deterioration in the job market - especially for

college-educated workers - might be difficult to contain via the

modest cyclical growth acceleration we expect."

Fed funds futures now point to a 57% chance that the Fed

will cut by 25 basis points next month, up from less than a 30%

chance a week ago.

Trading of cash U.S. Treasuries was closed in Asia on Monday

owing to the Japanese holiday, but futures held steady.

A record U.S. government shutdown that ended earlier this

month has muddied the outlook for U.S. rates, as policymakers

grapple with gaps in data that would normally guide their view

of the world's largest economy.

The U.S. Bureau of Labor Statistics said on Friday it had

cancelled the release of October's consumer price report because

the shutdown had prevented the collection of data.

ON ALERT FOR YEN INTERVENTION

The main focus in the currency market was on the yen,

which fell 0.2% to 156.72 per dollar and remained pinned near a

10-month trough.

Traders have been alert to the risk of intervention from

Japanese authorities to prop up the sliding yen, which has come

under pressure from growing worries about the nation's fiscal

health and low domestic rates.

Finance Minister Satsuki Katayama ramped up her jawboning

last week, which seems to have put a floor under the currency

for now, though investors see an increasing risk of an

intervention.

"Dollar/yen will definitely be going upwards even if you try

to intervene. So I think they will have to live with this. The

only way for them to do it is intervention to stop the pace

maybe, but I don't think they can stop the direction," said

Saktiandi Supaat, regional head of FX research and strategy for

global markets at Maybank.

"It'll be costly... you're going to fight against a tide.

The dollar seems to be very supported now."

Japan can actively intervene in the currency market to

mitigate the negative economic impact of a weak yen, Takuji

Aida, a private-sector member of a key government panel, said in

a television programme on public broadcaster NHK on Sunday.

Elsewhere, the dollar was firm despite the greater Fed

easing bets, leaving the euro languishing near a two-week

low at $1.1506. Sterling eased 0.06% to $1.3091 ahead of

Wednesday's budget announcement.

In commodities, Brent crude futures eased 0.16% to

$62.46 a barrel, while U.S. crude fell 0.17% to $57.96

per barrel.

Spot gold was down 0.3% to $4,054.19 an ounce.