Markets watch: Asia stocks slip as rate cut hopes fade; crude prices retreat after Russian exports resume
Asian markets started the week on a weak note, with investors turning cautious amid fading expectations of a US rate cut and rising concerns over stretched tech valuations. The uncertain mood also spilled over into cryptocurrencies, with bitcoin briefly dipping below its end-2023 level.As per news agency AFP, traders are increasingly doubtful the Federal Reserve will cut rates next month after Fed Chair Jerome Powell warned that another reduction was “not certain”, while other policymakers have also suggested they may pause. Inflation staying above the Fed’s 2% target has added to those nerves. Markets are now waiting for delayed US jobs and inflation data, held up by the record government shutdown.A fragile lead from Wall Street meant most Asian bourses slipped. Hong Kong, Shanghai, Sydney and Singapore were lower, while Seoul, Manila and Taipei managed gains, according to AFP. Tokyo also fell after data showed Japan’s economy contracted 0.4% in the September quarter. Tourism and retail firms were hit hard after China advised its citizens against travelling to Japan following a diplomatic row over remarks by Prime Minister Sanae Takaichi about Taiwan. As per AFP, Shiseido sank 9%, Takashimaya more than 5%, and Fast Retailing over 4%.In Australia, the ASX slipped to a four-month low after BHP dropped 0.7% following a British court ruling over a Brazilian dam collapse.Across markets, attention remains fixed on Nvidia’s earnings this week. The chipmaker, which became the first company to cross a $5 trillion valuation this month, has been central to the AI-fuelled surge. Concerns are rising about a possible bubble. Fiona Cincotta of City Index warned that investors are questioning “the amount of money companies are spending on the tech relative to the returns”.Expectations for a December US rate cut have dropped from over 60% last week to around 40%. US 10-year Treasury yields held at 4.156% in Tokyo. The delayed US jobs report arrives Thursday, though Reuters noted it may be “too stale” to shift market thinking.Bitcoin also weakened, with a fall to $92,935 — below its end-December finish — after climbing earlier this year on optimism linked to Donald Trump’s return to the White House.Crude prices edge lower as Russia restarts exportsOil prices slipped in early Asian trade on Monday after Russia resumed loadings at the key Novorossiysk export terminal following a two-day shutdown caused by a Ukrainian attack, reported Reuters. Brent crude fell 0.9% to $63.81 a barrel, while US WTI dropped 1% to $59.50.Both benchmarks had risen more than 2% on Friday after exports were halted at Novorossiysk and a nearby Caspian Pipeline Consortium terminal, collectively disrupting around 2% of global supply. While shipments have restarted, Ukraine’s continued strikes on Russian refineries — including Ryazan and Novokuibyshevsk — have kept the market on alert.Analyst Toshitaka Tazawa of Fujitomi Securities was quoted as saying by Reuters that traders are weighing the long-term risks to Russia’s exports while also taking profits after Friday’s rally. He added that expectations of oversupply from OPEC+ production increases remain, with WTI likely to hover around $60 within a $5 band.As per Reuters, Western sanctions remain a key watchpoint, with the US banning dealings with Russian oil firms Lukoil and Rosneft after November 21. President Donald Trump said Republicans are preparing legislation to penalise any country trading with Russia, adding that Iran could be included.Earlier this month, OPEC+ agreed to increase December output targets by 137,000 barrels per day and to pause further hikes in the first quarter of next year. Meanwhile, US drillers added three oil rigs last week, bringing the total to 417.
