Ahead of possibly market-moving data on inflation later in the week from the US and Europe as well as an oil producers' conference that may halt or prolong the recent price decline, Asian shares started the week cautiously on Monday.
Given the huge profits investors are sitting on, the approaching month-end may also prompt some caution. November saw a 9% increase in Japan's Nikkei, which gained 0.3%.
The Asia-Pacific equities outside of Japan index, which is the widest one tracked by MSCI, was flat but gained 6.7% for the month.
In contrast to Nasdaq futures, which fell 0.2%, S&P 500 futures dropped 0.1%. So far this month, the S&P 500 has gained 8.7%, marking its strongest month since mid-2022. It has rallied for the past four weeks in a row.
The preferred inflation gauge used by the US Federal Reserve is scheduled for release on Thursday. It is anticipated to decline to the lowest level since mid-2021, supporting market bets that rates will next move lower.
This week's schedule includes no less than eight federal speakers, including Federal Chair Jerome Powell, who will have an opportunity to counter the doves during the Fireside Chat on Friday.
According to Bruce Kasman, the head of JPMorgan's global economics division, unless there is a threat to growth or financial stability, central banks are not likely to implement easing within the first half of 2024.
As a result of recent events in the financial markets, this message of patience is probably going to be notable in the coming DM policy communications.
Christine Lagarde, the president of the European Central Bank, has also conveyed that she is not in a rush to ease, and she will have another chance to emphasize this point on Monday at the European Parliament.
It is anticipated that the data on European Union consumer prices for November, which is coming on Thursday, will demonstrate a cooling of both headline and core rates, supporting market pricing for reductions.
The ECB's rate is expected to be approximately 83 basis points, and the US will ease policy by nearly 90 basis points next year.
The possibility of lower borrowing rates has led to a significant increase in bond prices; 10-year Treasury yields have dropped 37 basis points this month to 4.49%.
Consequently, this has caused the dollar to weaken against a group of important currencies this month, dropping 3%.
With the dollar remaining stable at 149.53 yen, the euro moved up to $1.0940 on Monday, not far from its latest four-month top of $1.0965.
At $2,000 per ounce, non-yielding gold is close to its October high of $2,009.29, which has been supported by the decline in yields.
In the days leading up to OPEC+'s conference on November 30, which was originally scheduled for Sunday but has been postponed due to producers' inability to agree on a stance, the oil market is expected to be very volatile.
Some reports indicate that Saudi Arabia may prolong its voluntary production reduction of a further one million barrels per day, which is scheduled to expire at the close of December, while African producers of oil are reportedly demanding greater caps for 2024.
While US crude gained 14 cents to $75.68 a barrel, Brent increased by 15 cents to $80.73 on Monday due to the uncertainty that kept prices tight.