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Asian Stocks Up, Inflation Worries Persist -Breaking

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© Reuters.

By Gina Lee

Investing.com – Asia Pacific stocks were mostly up on Tuesday morning, and U.S. Treasury remained high, as investors’ focus remains on inflation that could prompt central banks to hike interest rates quicker than expected.

Japan’s gained 0.52% by 9:02 PM ET (2:02 AM GMT) and South Korea’s was up 0.38%.

The Australian dollar was 0.43 percent lower and the release minutes of its November meeting earlier today.

Hong Kong’s gained 0.58%.

China’s inched down 0.01% while the inched up 0.01%, as a between Chinese President Xi Jinping and his U.S. counterpart Joe Biden got underway.

As expectations increased about the possibility that the U.S. Federal Reserve might raise interest rates sooner than anticipated, the benchmark rate stayed above 1.60%.

Global shares have halted a rally that was near records due to persistently high inflation and doubts about whether these pressures are temporary. Even central bank leaders are worried, with Bank of England Governor Andrew Bailey saying he’s “very uneasy about the inflation situation.”

However, investors remain cautiously optimistic. “Inflation will likely get the Fed hiking quickly but then they can stop after a few hikes and markets can calm down,” Oanda senior market analyst Edward Moya said in a note.

“At some point, the Fed will have to tighten financial conditions” and so some investors are hesitating about “remaining full tilt with stocks,” the note added.

Thomas Barkin (Esther George), Raphael Bostic and Patrick Harker will address various events later in the day.

Other Fed officials will speak later in the week, with Fed Vice Chairman Richard Clarida and Fed Bank of San Francisco President Mary Daly due to speak at Friday’s Asia Economic Policy Conference.

The suspense about the top Fed position also continues, with Senate Banking Chairman Sherrod Brown saying he was told to expect an “imminent” announcement about Biden’s pick to chair the central bank. Jerome Powell (current chairman) and Lael Brainard (Fed Governor) are the other contenders.

On the data front, Monday’s was a stronger-than-expected 30.90 in November. The U.S. data will be available later today, while the Eurozone figures are due Wednesday.

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