September 14, 2023 (MLN): Stocks in Asia broadly climbed on cautious optimism the Federal Reserve may pause rate hikes following the US inflation report that was in line with estimates, while the dollar slipped, as Bloomberg reported.
Japan’s Nikkei 225 outperformed the region and equities in South Korea and Australia gained as a benchmark index for the region snapped a two-day loss. US stock futures also rose.
Japanese shares received an extra boost after Economic Revitalization Minister Yoshitaka Shindo said the government will use all policies for economic management and highlighted the need for strong economic measures.
The greenback weakened against all of its Group-of-10 peers and Treasury yields ticked lower. The euro ticked higher against the dollar as traders awaited the rate decision by the European Central Bank later Thursday.
Elsewhere, demand for Japanese 20-year bonds at auction was the strongest since May 2020, soothing concerns about a potential normalizing of monetary policy by the Bank of Japan.
The US’s core consumer price index, which excludes food and energy costs, increased 4.3% from a year ago — in line with estimates and marking the smallest advance in nearly two years.
Also due later Thursday are US retail sales and producer price data.
“Asia has some clear air to reclaim some of the week’s losses,” said Kyle Rodda, a senior analyst at Capital.com in Melbourne.
“US inflation offered up more questions than answers, but it’s a volatility event out of the way, so that’s supportive of risk assets at the margins – the proverbial can has been kicked down the road just a little.”
Hong Kong and mainland China shares swung between gains and losses as concerns remained in the property sector. Country Garden Holdings Co. fell as the deadline approaches for holders of a yuan bond to vote on the company’s repayment extension request.
Eyes on Next Data
Evidence is building that Europe is facing persistent cost pressures that have been made worse by soaring energy prices.
Money markets are pricing in a two-thirds chance the ECB raises interest rates by a quarter of a percentage point, a rapid shift from earlier this month where traders were firmly in the camp rates would be held steady.
“It will be a close decision,” said Imre Speizer, a strategist at Westpac Banking Corp. in Auckland. “Inflation persistence is likely to feature in the ECB’s upgraded projections” with core prices more stubborn, he wrote in a note to clients.
The S&P 500 was little changed on Wednesday while the Dow Jones Industrial Average underperformed. American Airlines Group Inc. led US stock losses after cutting its earnings outlook amid a jump in jet fuel prices.
Most megacaps rose, with the chiefs of five of the 10 biggest US companies appearing at a closed-door Senate meeting to shape how artificial intelligence is regulated. Apple Inc. fell as China flagged security problems with iPhones.
In commodities, oil trade near the highest since November after the International Energy Agency added to warnings of a supply shortfall, while gold edged higher after losses in the last two sessions.
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Posted on: 2023-09-14T09:43:05+05:00
