Asian markets mixed as US inflation approaches

Asian markets mixed as US inflation approaches

  A number of Fed policymakers are lining up to deliver speeches, which will be viewed for their views on the best course of action for the central bank as they try to control prices without pushing the economy into recession.    </p><div>
<p class="rtejustify"><strong>Stock markets were mixed on Tuesday as investors cautiously awaited the release of US inflation data, aware that a major error in either direction could have major implications for the Federal Reserve's interest rate plans over the next few months.</strong>

Wall Street’s three major exchanges delivered tepid advances, as New York traders bided their time ahead of the closely watched CPI report as well as other key numbers including retail sales and unemployment claims.

Earnings from retail giants Walmart and Target will also provide an idea of ​​consumer activity later in the day.

A number of Fed policymakers are lining up to deliver speeches, in which their views will be sought on the best course of action for the central bank as it tries to control prices without pushing the economy into recession.

There is a general consensus that these rates have already reached their peak in terms of interest rates, having reduced inflation from more than nine percent last year, although officials have left the door open to raise interest rates again.

The consumer price index is expected to reach 3.3% in October, down from 3.7% in September, according to a Bloomberg survey of economists. But that’s still well above the Fed’s 2% target.

“While US economic data is expected to be fairly good, investors are keenly aware that fluctuations in inflation, especially fluctuations to the upside, pose an ongoing risk to markets,” said Stephen Innes of SPI Asset Management.

“Although the prospect of renewed discussion on an eventual rate hike represents a significant hurdle to overcome, it is too early to completely rule out the possibility of a rate hike in December (or January).

“Even if data comes in hotter than consensus and doesn’t move the needle for December, it could call for a rate hike in January.”

Other analysts noted that policymakers have reaffirmed their determination to control inflation and will keep borrowing costs high for some time, even if they do not rise again.

Leila Pence, of Pence Wealth Management, said Fed Chairman Jerome Powell and his team “have done a lot, but interest rates will stay high for a while longer just as an insurance policy.”

“They will be much slower to cut interest rates, and that will be a little unpleasant for the market next year, but they will deal with it,” she told Bloomberg TV.

Asian markets struggled to break through during the day as traders became increasingly nervous.

Shanghai, Tokyo, Sydney, Seoul, Wellington, Taipei and Jakarta rose slightly. However, Hong Kong, Singapore, Manila and Bangkok stocks fell.

The London Stock Exchange opened lower, but Paris and Frankfurt both rose.

There are also hopes that a meeting this week between US President Joe Biden and his Chinese counterpart Xi Jinping will ease tensions between the economic superpowers and give a much-needed boost to markets.

“A signal that there are further efforts to put an end to bilateral relations or even some modest improvement in the short term could provide a temporary boost to investment sentiment,” said Xiao Jiaqi of Credit Agricole CIB.

Key numbers around 0810 GMT

Tokyo – Nikkei 225: up 0.3 percent to 32,695.93 (close)

Hong Kong – Hang Seng Index: down 0.2% to 17,396.86 (close)

Shanghai – Composite: up 0.3% to 3,056.07 (close)

London – FTSE 100: down 0.1 percent to 7,420.10

USD/JPY: Decreased to 151.64 yen from 151.71 yen on Monday

EUR/USD: rose to $1.0704 from $1.0701

GBP/USD: rose to $1.2293 from $1.2280

EUR/Pound: fell to 87.08 pence from 87.12 pence

West Texas Intermediate crude: rose 0.2 percent to $78.40 a barrel

Brent North Sea crude rose 0.2 percent to $82.68 a barrel

New York – Dow Jones: rose 0.2 percent to 34,337.87

(Tags for translation) Asian market

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