Asian markets struggle for traction ahead of US inflation data

Asian markets struggle for traction ahead of US inflation data


Hong Kong: Investors proceeded cautiously in early Asian trading on Tuesday, waiting for US inflation data, which may play a key role in determining when the Federal Reserve will begin to cut back on the market’s monetary policy.

The first rise of the Wall Street S&P 500 and the Dow Jones Index after falling for five consecutive days was not enough to stimulate the overall rise of Asian stock markets, although Tokyo is expected to hit its highest close in more than 30 years because of hope for new stimulus measures.

After the authorities tightened controls on the technology industry, experts are also paying close attention to China as part of a broad regulatory crackdown on private companies.

But the main event this week is the US consumer price data released later on Tuesday. Data in the previous few days showed that the costs paid by companies at the factory gates rose at a record rate last month due to the surge in demand and supply. Labor shortage.

The report put pressure on the Federal Reserve to start reducing its ultra-loose monetary policy as early as November.

The consumer price index is expected to exceed 5%, and analysts warned that readings well above this level may force the central bank to take action to prevent inflation from getting out of control.

Edward Moya of OANDA said that the uncertainty of the readings will keep traders on the sidelines for the time being.

He wrote in a comment: “Investors do not want to hold large positions before the release of inflation data, because as Covid inflation continues to hinder upside risks in the supply chain.”

“If inflation is higher than expected, the reduction in expectations may shift from December to November.”

Hong Kong, Shanghai, Sydney, Wellington and Taipei all fell, but Tokyo, Singapore, Seoul, Manila and Jakarta rose.

Fears about a new outbreak of the coronavirus in China have also hit confidence, with dozens of positive cases in Fujian Province, forcing authorities to conduct large-scale testing in a county and shut down public transportation.

The news sparked discussions about the possibility that leaders might re-implement severe lockdown measures to prevent the spread of the disease, which dealt a blow to the Chinese economy when it broke out again earlier this year.

National Australia Bank’s Tapas Strickland stated that after the recent unexpectedly weak service and manufacturing data, “another round of blockade due to China’s elimination strategy Restrictions may further weaken the momentum.”

In Washington, the Democrats in the House of Representatives announced a comprehensive tax reform plan on Monday, including reversing the Trump-era tax cuts and raising interest rates for the wealthy and businesses, as they hope to raise nearly $3 trillion to help subsidize President Joe Bae. Announce a trillion-dollar social expansion plan. Safety nets and other public investments.

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