Bloomberg Daybreak: Asia Edition Asia Stocks Steady, South Korea GDP Growth
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Dec 3, 2025 Frederic Neumann, Chief Asia Economist at HSBC, discusses South Korea's impressive GDP growth of 1.3% and its implications, highlighting a K-shaped recovery led by AI. He notes that despite strong headlines, consumer spending remains weak and risks in China loom. Chris Zaccarelli, Chief Investment Officer at Northlight Asset Management, offers insights on U.S. inflation and the Federal Reserve's potential policies. He views cryptocurrencies as a key risk barometer for market trends and recommends diversifying beyond U.S. assets amid rich valuations.
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Fragile Growth Behind Strong GDP Numbers
- Headline GDP growth in Asia looks strong but is fragile beneath the surface due to export concentration and weak consumer spending.
- Frederic Neumann warns this weak domestic demand makes inflation unlikely to rise and could force rate cuts if exports falter.
Asia-U.S. Monetary Divergence Likely
- Asia's inflation dynamics differ from the U.S., with many countries facing low core inflation or deflationary risks.
- Neumann expects a divergence where Asia may cut rates while the U.S. remains relatively tighter.
Prepare For Incremental China Stimulus
- Expect China to deliver stimulus in 2026 to prevent further slowdown and missing growth targets.
- Plan for incremental, targeted stimulus rather than a large growth-igniting package, says Neumann.