Asian markets mixed as traders eye US inflation report

Asian markets mixed as traders eye US inflation report

Traders are awaiting the release of key US data later in the week
Traders are awaiting the release of key US data later in the week. Photo: Daniel ROLAND / AFP
Source: AFP

Asian markets were mixed Monday ahead of key US inflation data later in the week, with traders still concerned the Federal Reserve could lift interest rates again.

Decision-makers at the central bank lined up last week to warn that more tightening could be needed to bring prices under control, tempering optimism that the hiking cycle had come to an end.

That sparked a sell-off in Asia on Friday, though a tech-led surge on Wall Street provided traders some support on Monday.

But with focus firmly on the consumer price index and retail sales later in the week, gains were limited.

"The forthcoming CPI report holds the potential to reintroduce the possibility of a rate hike," said Stephen Innes at SPI Asset Management.

"Presently, the market has largely discounted the likelihood of another increase.

Read also

Equities in retreat as Powell warns rate hikes still on table

"While it was previously suggested that an aberrant inflation overshoot would be necessary to make the upcoming policy gathering next month uncertain, this week's data... may indicate that the risks are still leaning towards a sustained higher inflation plateau."

In early trade, Tokyo, Hong Kong, Seoul, Taipei and Jakarta were up but Shanghai, Sydney, Manila and Wellington were in the red.

Fears that global rates could remain elevated for an extended period were fanned by European Central Bank President Christine Lagarde, who on Friday forecast a resurgence of inflation.

She also said officials would not start cutting rates for at least "the next couple of quarters".

Expectations that US borrowing costs will not come down anytime soon boosted the dollar, with traders keeping an eye on its movement against the yen after Japanese authorities warned they could intervene to support their currency.

However, Sonal Desai at Franklin Templeton said the Bank of Japan would likely shift from its ultra-loose monetary policy, giving the yen a much-needed lift.

Read also

Most Asian markets see fresh gains as traders await Fed guidance

"We are going to see a change in policy in Japan and that is going to make the yen attractive," she told Bloomberg Television.

"The BoJ will ultimately be pushed towards changing its own interest rate stance which will bring money back."

Investors will also be watching a planned meeting between US President Joe Biden and Chinese counterpart Xi Jinping at the APEC summit in San Francisco later in the week amid signs tensions were easing between the economic superpowers.

Key figures around 0230 GMT

Tokyo - Nikkei 225: UP 0.6 percent at 32,750.41 (break)

Hong Kong - Hang Seng Index: UP 0.1 percent at 17,215.38

Shanghai - Composite: DOWN 0.3 percent at 3,029.99

Dollar/yen: UP at 151.63 yen from 151.47 yen on Friday

Euro/dollar: DOWN at $1.0684 from $1.0686

Pound/dollar: UP at $1.2234 from $1.2224

Euro/pound: DOWN at 87.33 pence from 87.39 pence

West Texas Intermediate: DOWN 0.8 percent at $76.58 per barrel

Read also

Asian markets drift as traders weigh outlook for rates

Brent North Sea crude: DOWN 0.8 percent at $80.82 per barrel

New York - Dow: UP 1.2 percent at 34,283.10 (close)

London - FTSE 100: DOWN 1.3 percent at 7,360.55 (close)

New feature: Сheck out news that is picked for YOU ➡️ click on “Recommended for you” and enjoy!

Source: AFP

Authors:
AFP avatar

AFP AFP text, photo, graphic, audio or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP news material may not be stored in whole or in part in a computer or otherwise except for personal and non-commercial use. AFP will not be held liable for any delays, inaccuracies, errors or omissions in any AFP news material or in transmission or delivery of all or any part thereof or for any damages whatsoever. As a newswire service, AFP does not obtain releases from subjects, individuals, groups or entities contained in its photographs, videos, graphics or quoted in its texts. Further, no clearance is obtained from the owners of any trademarks or copyrighted materials whose marks and materials are included in AFP material. Therefore you will be solely responsible for obtaining any and all necessary releases from whatever individuals and/or entities necessary for any uses of AFP material.