Asia-Pacific markets trade lower after Fed rate hike, signals more ahead

China’s industrial production for November rose 2.2%, after growing 5% in October, official data showed. That’s less than expectations for 3.6% growth in a Reuters survey.

Retail sales fell 5.9% on an annualized basis, more than expectations of a 3.7% drop in a Reuters survey and a 0.5% drop the previous month.

— Jihye Lee

JPMorgan expects markets in the Asia-Pacific region to end the week on a cautious tone after the Federal Reserve raised interest rates by 50 basis points.

“Given the U.S. market reaction after the FOMC meeting, we expect Asian markets to end the week with a more cautious tone,” said Tai Hui, the firm’s chief Asia-Pacific market strategist. , in a footnote.

Tai added that a weaker inflation print is needed before the ferocity of the Fed wears off, while the region could be more optimistic about China’s expected reopening.

“The medium-term outlook for China’s economic reopening and the resilience of domestic demand in Asia could be a bright spot as the United States and Europe face more growth challenges,” Tai said. . “We would need weaker inflation data for the Fed to tone down its hawkishness.”

— Jihye Lee

South Korea’s revised trade data for November was flat, according to official data from the Bank of Korea.

Imports rose 2.7% while exports fell 14%, in line with the previous month’s reading, leading to a trade deficit of $6.99 billion, slightly lower than the previous month’s reading of 7.01 billions of dollars.

Import prices rose 14.2% from a year ago after rising 19.8% the previous month. Export prices rose 8.6% in November from a year ago, after rising 13.7% in October.

— Jihye Lee

Japan’s exports and imports for November rose more than expected on an annualized basis, official data showed.

Exports for the month rose 20%, beating expectations of 19.8% in a Reuters survey. Imports rose 30.3%, also higher than expectations of 27% in a Reuters poll.

This led to a bigger-than-expected trade deficit of 2.02 trillion yen ($14.91 billion) after registering 2.16 trillion yen ($15.96 billion) the previous month.

— Jihye Lee

Investors will have a second opportunity to participate in the stock market rally after China announced an easing of Covid-19 restrictions, according to Bank of America.

The bank named more than 10 stocks after finding “green shoots of recovery in high-frequency data” that indicate rising profits for companies exporting to China.

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—Ganesh Rao

Australia’s unemployment rate for November remained at 3.5% on an annualized basis, in line with expectations from a Reuters poll and stable from the previous month.

Official data from the Australian Bureau of Statistics showed that the labor force participation rate also remained at 66.7% and the employment-to-population ratio remained at 64.4%.

Monthly hours worked rose to 1.89 billion.

— Jihye Lee

The Fed announced that it would raise interest rates by 50 basis points, marking the end of the pattern of 75 basis point hikes seen in recent months.

Before this decision, the Fed had raised rates by 75 basis points in the last four meetings. One basis point equals 0.01%.

The 50 basis point hike was widely expected ahead of the meeting.

This is the final policy decision expected from the central bank in 2022.

— Alex Harring

Federal Reserve Chairman Jerome Powell said Wednesday that recent positive signs of inflation were not enough for the central bank to dampen interest rate hikes.

“It will take a lot more evidence to be confident that inflation is on a sustained downward path,” Powell said at his press conference after the meeting.

The comments came as the Fed raised its benchmark rate another half a percentage point and signaled that at least three more quarter points of hikes are ahead. The decision also comes a day after November’s consumer price index rose just 0.1%, indicating that inflation may have peaked.

However, Powell said inflation remained a problem.

“Pricing pressures remain evident across a wide range of goods and services,” Powell added.

—Jeff Cox