Asian equities decline but hopes for positive news on rate cuts are still in focus

A week full of high-profile global central bank meetings and data on U.S. inflation could make or break the market's hopes for an early and swift round of rate cuts next year. On Monday, Asian shares continued their downward trend.

Investors' expectations for a March Federal Reserve cut have already been lowered by an optimistic payrolls report; however, May is still priced at a 76% chance of happening.

The emphasis this week will be on Chair Jerome Powell's press conference and the so-called dot plots for rates, as it is expected that the Fed will maintain rates at 5.25–5.50%.

The outlook will also be impacted by Tuesday's consumer price report for November, which analysts predict will show a 0.3% increase in the core and an unchanged headline rate.

Norway is the only country that is thought to be a potential hiker when the European Central Bank, Bank of England (BoE), Norges Bank, and Swiss National Bank (SNB) meet on Thursday. Additionally, there's a chance the SNB will experiment with more intervention to devalue the franc.

Investor caution was understandable given the significant stakes in the results, and MSCI's largest index of Asia-Pacific shares outside of Japan decreased by 0.65%.

Following the jobs report, gold suffered in the commodities markets and was last seen trading at $1,998 an ounce.

After falling 3.9% to five-month lows last week due to uncertainty over whether all OPEC+ members would continue with supply cuts, oil prices are now slightly higher. The announcement by Washington that it would replenish its strategic oil reserves helped to stabilise prices.

The result of the COP28 climate summit, which is attempting to reach a historic agreement to gradually phase out the use of fossil fuels worldwide, will also be watched by traders.

(Sources: investing.com, reuters.com)