Asian markets posted a mixed performance on Monday as investors braced for an anticipated Federal Reserve interest‑rate cut later this week. The U.S. central bank is expected to lower borrowing costs, most likely by 25 basis points, though some analysts see a 50‑basis‑point reduction as possible. This outlook follows recent data showing a softening labor market and relatively stable prices, despite the impact of President Donald Trump’s tariff war. The Fed’s policy meeting on Wednesday will be closely watched, with most market observers forecasting a 25‑basis‑point cut. President Trump, however, has hinted that a larger reduction could be on the table, saying, “I think you have a big cut. It’s perfect for cutting.” Chris Weston of Pepperstone noted that while a 50‑basis‑point cut is conceivable, the market would be surprised if the Fed did not opt for a 25‑basis‑point reduction.
In addition to the Fed, the central banks of Canada, Britain and Japan are also set to meet this week, adding to the volatility in Asian markets. Some indices rose while others fell. The Nasdaq hit a new high on Friday, and early trade saw gains in Hong Kong, Singapore and Jakarta. Seoul reached a record high after the government scrapped plans to lower the capital‑gains‑tax threshold for stock investors. Conversely, Shanghai slipped as China’s economic data disappointed, with slower retail‑sales and industrial‑production growth. Sydney and Wellington also posted losses, with ANZ Bank retreating after agreeing to pay a record A$240 million fine for “widespread misconduct.” Tokyo’s market was closed for a holiday.
Attention will also turn to the upcoming China‑U.S. talks in Madrid, which will address trade and other issues. Chinese Vice‑Premier He Lifeng and his team are set to discuss the TikTok dispute with the U.S. delegation led by Treasury Secretary Scott Bessent, following China’s investigations into the U.S. semiconductor sector.
Key figures around 0230 GMT included the Hang Seng Index, up 0.2 % at 26,447.34, and the Shanghai Composite, down 0.1 % at 3,867.95. The euro/dollar fell to $1.1728, while the pound/dollar rose to $1.3561. Oil prices edged higher, with West Texas Intermediate up 0.5 % to $63.01 per barrel and Brent North Sea Crude up 0.4 % to $67.28 per barrel.
The Federal Reserve’s rate decision will have significant implications for global markets, and investors will be watching closely for any shift in monetary policy. The China‑U.S. negotiations will also be crucial in shaping the future of trade relations between the two nations. As the week unfolds, market volatility is likely to persist as investors seek clarity on these key issues.
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