Asian shares fall ahead of U.S. CPI
Reuters · 14 Nov 2022 761 Views
Pedestrians wearing protective masks amid the coronavirus disease (COVID-19) outbreak, walk past an electronic board displaying Japan's Nikkei index outside a brokerage in Tokyo

SYDNEY, Nov 10 (Reuters) - Asian share markets were tense on Thursday and the dollar held on to its overnight gains before the big test of a U.S. consumer inflation report, while market sentiment took a dive as the likely collapse.

With no final results available from the U.S. mid-term elections, investors were turning to the upcoming inflation data later in the day, which are likely to show a decline in both the monthly and yearly core numbers for October to 0.5% and 6.5%, respectively, according to a Reuters poll.

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) dropped 0.6% in early trade, dragged lower by outsized declines in China's bluechips (.CSI300) and Hong Kong's Hang Seng index (.HSI).

Japan's Nikkei (.N225) lost 1%.

China is again grappling with a COVID surge, with the southern metropolis of Guangzhou reporting thousands of cases. Apple Inc (AAPL.O) supplier Foxconn (2317.TW) plans to update its fourth-quarter outlook on Thursday, after strict COVID curbs remained in place at its major plant in China despite the lifting of a lockdown.

Elsewhere, focus remained squarely on inflation.

"While inflation globally has peaked, the cooling is not sufficiently large or broad-based to bring rate hiking cycles to a convincing conclusion, in our view," said analysts at J.P. Morgan.

Still, some central banks in both developed and emerging markets had become dovish as they worried about monetary tightening pushing down economic growth, the analysts noted.

The futures market currently shows investors believe the target U.S. federal funds rate will peak around 5.1% by next June, and the chances of a rise of 50 or 75 basis points are tilted in favour of a half-point increase next month.

Overnight on Wall Street, shares ended lower as Republican gains in midterm elections appeared more modest than some had expected. Republicans were still favoured to win control of the House of Representatives but key races were too close to call. 

The U.S. dollar on Thursday held onto its most of its gains overnight against a basket of currencies.

The sterling rose 0.2% against the greenback, after tumbling 1.6% in the previous session.

U.S. Treasury yields were lower on Thursday.

The yield on benchmark 10-year notes eased 6 basis points to 4.0866% while the yield on two-year notes edged 5 basis points lower to 4.5732%.

In commodities, oil prices continued to retreat on Thursday, after tumbling about 3% in the previous session on fears of demand from China and rising U.S. crude stocks.

U.S. crude oil futures eased 0.3% to $85.59 per barrel, while Brent crude futures fell by a similar margin to $92.37.

Gold was little changed, with the spot price at $1705.92 per ounce.

(Source : Reuters) , all rights reserved by original source.