Asian stocks were steady Wednesday and US equity futures rose as investors weighed Chinese inflation data for clues on whether the price pressures sapping the global economy are peaking.
Shares climbed in China and Hong Kong and were mixed in Japan. A Wall Street advance Tuesday brought some respite from this year’s equity rout, which has been fueled by fears of an economic downturn as borrowing costs jump.
Treasury yields were little changed and a dollar gauge remained near the highest level since 2020 as investors parsed Federal Reserve comments.
Oil fluctuated around $100 a barrel after shedding about 8% this week. Growth concerns driven by China’s Covid lockdowns are buffeting crude.
The Chinese data showed factory-gate prices rose 8%, faster than expected. The US consumer-price index later is expected to moderate but stay above 8%. Disruptions linked to Russia’s war in Ukraine and China’s outbreak are stoking the cost of living.
A high US print “will give the Fed license to raise rates even faster” and would be very bad for technology stocks, Ellen Hazen, chief market strategist at F.L. Putnam Investment Management Co., said on Bloomberg Television.
Fed officials reinforced Chair Jerome Powell’s message that half-point hikes are on the table in June and July. But Cleveland Fed President Loretta Mester told Bloomberg Television that “we don’t rule out 75 forever,” referring to a more aggressive, three-quarter-point increase.
The “bar is low” for a surprise from the US inflation data amid ebbing consumer sentiment, according to Brent Schutte, chief investment strategist at Northwestern Mutual Life Insurance Co.
“Things are going to be just a bit better at the margin,” he said. “The Fed overall is going to tighten less. That will lead to a market that begins to find its feet and move higher in coming quarters as inflation does come off the boil.”
Elsewhere, Ukraine and Russia clashed over natural gas sent via pipelines to Europe in a spat that could disrupt supplies. Prices for the commodity jumped.
ere are key events to watch this week:
- US CPI, Wednesday
- EIA crude oil inventory report, Wednesday
- San Francisco Fed President Mary Daly speaks, Thursday
- US PPI, initial jobless claims, Thursday
- University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures rose 0.2% as of 10:53 a.m. in Tokyo. The S&P 500 rose 0.2%
- Nasdaq 100 futures rose 0.4%. The Nasdaq 100 rose 1.3%
- Japan’s Topix index fell 0.3%
- Australia’s S&P/ASX 200 index fell 0.3%
- South Korea’s Kospi index fell 0.2%
- Hong Kong’s Hang Seng Index added 0.5%
- China’s Shanghai Composite Index increased 0.8%
Currencies
- The Bloomberg Dollar Spot Index was steady
- The euro was at $1.0529
- The Japanese yen was at 130.41 per dollar
- The offshore yuan was at 6.7583 per dollar
Bonds
- The yield on 10-year Treasuries was at 2.99%
- Australia’s 10-year yield fell six basis points to 3.50%
Commodities
- West Texas Intermediate crude rose 1.1% to $100.90 a barrel
- Gold was at $1,836.93 an ounce
Read More: Asia stock market steady, US equity futures rise as investors weigh inflation data; oil