Asian markets build on rally on hopes US will avoid recession
28 January 2023
AFP :
Asian markets rose again Friday as fears about a possible recession in the US economy were soothed by data showing it grew more than expected in 2022, adding to the broadly upbeat tone across trading floors this year.
Investors tracked a rally on Wall Street fuelled by the figures, while they are now awaiting the release of closely watched inflation data later in the day and then the Federal Reserve's latest policy decision next week.
There is growing hope that the central bank will lift interest rates by just 25 basis points, having slowed its pace of increases last month following four straight bumper hikes aimed at bringing inflation down from multi-decade highs.
There was also a suggestion from the Bank of Canada that it could hold fire at its next gathering, following a programme of tightening. "The BoC's explicit pause signal has many thinking whether other central banks will do likewise -- note BoC was one of the first to start the initial hiking cycle," said National Australia Bank's Tapas Strickland. Central banks spent last year ramping up borrowing costs to battle soaring prices and any sign of strength in the economy was taken as a bad sign that policymakers would continue to tighten policy sharply, threatening companies' profits.
Concern towards the end of the year focused on a possible global recession caused by the restrictive policies, with several observers warning that top economies were likely to suffer a so-called hard landing.
