Asian stocks rebounded from last week’s selloff as muted US inflation helped reignite Federal Reserve rate cut bets. The dollar steadied after a retreat.
The MSCI Asia Pacific Index snapped a six-day decline, with benchmarks in South Korea and Taiwan rising more than 1%.
US equity contracts climbed after the so-called core personal consumption expenditures price index increased at the slowest pace since May, spurring a 1.1% gain in the S&P 500 Index on Friday.
Monday’s moves offer investors some respite after a stream of robust US economic data saw the Fed scale back the number of cuts it anticipates in 2025.
Overall sentiment remains cautious as investors brace for the prospect of sweeping global tariffs imposed by US President-elect Donald Trump, and as China continues to see a lackluster economic recovery.
“Lower than expected US core PCE inflation data for November suggests that the Fed may have gotten too negative on inflation,” Shane Oliver, head of investment strategy and chief economist at AMP Ltd., wrote in a note to clients.
