Equities in Asia were poised to open lower on Tuesday, ahead of interest-rate decisions by major central banks across the globe due later this week, including the US Federal Reserve. 

Futures contracts for Hong Kong equities pointed to a decline with a gauge of US-listed Chinese stocks falling over 2%. Australian stocks fluctuated while contracts in Japan advanced. The moves came after a positive session on Wall Street, with the Nasdaq 100 gaining more than 1% to reach a record high. MicroStrategy Inc advanced, fuelled by its pending inclusion in the tech-heavy gauge. The 10-year Treasury yield was flat at 4.40%.

Eyes will be on a multitude of central bank policy decisions slated for this week, including Mexico, the US and Japan. Sentiment in the US is relatively positive, with a widely expected quarter-point rate cut from the Fed on Wednesday seen as adding fresh support and extending gains in stocks. That stands in contrast to losses in Asia on Monday, after a soft data print in China.

“Near-term momentum may depend on what Fed chair (Jerome) Powell says after the announcement, and whether retail sales or the PCE Price Index catch the market off guard,” said Chris Larkin, manging director, trading and investing, at E*Trade from Morgan Stanley.

Chinese retail sales growth unexpectedly weakened in November, despite signs of improvement in the housing market. The data builds on traders’ disappointment last week, when Beijing pledged to boost consumption but failed to offer details on fiscal stimulus. 

The retail-sales data “is a reflection of the dire situation there and how the stimulus efforts have prioritised optics over delivering meaningful economic improvements,” said Charu Chanana, chief investment strategist at Saxo Markets in Singapore. “Even for a tactical recovery, we need more after a series of false starts and the risk of tariffs ahead.”

In currencies, an emerging-market foreign-exchange gauge edged lower with the Brazilian real slumping to a record low, despite the central bank’s efforts to boost it. Bloomberg’s dollar index, meanwhile, fluctuated between modest gains and losses on Monday. 

The Canadian dollar steadied on Tuesday after declining modestly on news that Prime Minister Justin Trudeau will name Dominic LeBlanc finance minister. Earlier, finance minister Chrystia Freeland resigned from Trudeau’s cabinet because of differences over how to prepare for the Trump administration.

In the US, traders will be parsing fresh economic data. On Monday, data showed that activity at US service providers is expanding at the fastest pace since October 2021. Meanwhile, a measure of New York state factory activity retreated by the most since last May.

The main focus remains Wednesday’s Fed decision, which will be followed by policy announcements in Japan, the Nordics and the UK this week. Even if we get a “hawkish cut” from the Fed, it would be because the central bank sees underlying strength in the economy, and that means the rally in US stocks could continue to broaden out, Tony DeSpirito, BlackRock’s global chief investment officer of fundamental equities, said on Bloomberg TV. 

Elsewhere, French bonds lagged peers on Monday, after Moody’s Ratings cut the country’s credit rating. The Bank of France trimmed its domestic growth outlook, with the central bank citing political upheaval as a drag on household and business confidence. 

In commodities, oil extended losses on Tuesday, after China’s latest economic data reinforced concerns over weakening demand in the biggest importer. Meanwhile, gold steadied, holding on to a slight gain in its previous session.

  - Bloomberg