Asian equities slip ahead of key US CPI data: markets wrap

Asian shares declined and currencies fluctuated amid caution in markets as investors await highly anticipated inflation data later Thursday.

Stocks fell in Japan, Hong Kong and South Korea while US futures inched up after a sixth consecutive decline for the S&P 500, which fell to the lowest level since November 2020. The dollar held on to recent gains and the yen crept back from a fresh 24-year low that has put traders on watch for intervention from Japan.

Investors are on tenterhooks as they await US consumer price figures that may determine if the Federal Reserve delivers a fourth-straight outsized hike in interest rates, piling more pressure on an already struggling world economy. Minutes released on Wednesday from the Fed’s last meeting suggested some officials considered reducing the pace of rate hikes, which triggered a brief surge on Wall Street that quickly unwound.

“The Fed needs data to start finding an off-ramp,” Carol Schleif, deputy chief investment officer at BMO Family Office, said on Bloomberg Television. “That’s a tough market to be in. Until we get a bunch more data, markets will have to figure out how to find their footing.”

Yen traders prepared for a spike in volatility when the CPI report lands. The currency fell 2% minutes after last month’s release. The offshore yuan inched lower. Investors speculated that Chinese authorities are employing a tactic used in 2019 to steady the currency.

The pound declined slightly in Asia after a busy day of bond buying from the Bank of England, which reiterated the view that its emergency support for the gilt market would cease on Friday, contradicting a media report that suggested it could endure. UK pensions were found offloading assets around the world to shore up liquidity ahead of the move.

The Biden administration is considering adding aluminum to economic sanctions against Russia. Shares in Rusal, the Russian aluminum giant that has a listing in Hong Kong, fell sharply. Vladimir Putin said any energy infrastructure in the world is at risk after the explosions on the Nord Stream pipelines. Oil fell.

Stocks

• Futures on the S&P 500 rose 0.2% as of 1:02 p.m. Tokyo time. The S&P 500 fell 0.3%
• Futures on the Nasdaq 100 rose 0.1%. The Nasdaq 100 fell 0.1%
• The Topix Index fell 0.7%
• The S&P ASX Index rose 0.2%
• The Hang Seng Index fell 1%
• The Shanghai Composite Index rose 0.2%
• Euro Stoxx 50 futures fell 0.4%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro was little changed at $0.9700
• The Japanese yen was little changed at 146.84 per dollar
• The offshore yuan fell 0.1% to 7.1846 per dollar

Cryptocurrencies

• Bitcoin fell 0.4% to $19,084.07
• Ether fell 1% to $1,286.13

Bonds

• The yield on 10-year Treasuries advanced two basis points to 3.92%
• Australia’s 10-year yield advanced five basis points to 4.00%

Commodities

• West Texas Intermediate crude fell 0.2% to $87.11 a barrel
• Spot gold fell 0.2% to $1 669.18 an ounce