Shanghai, Jan. 13 (BNA): Asian stocks were mixed on Thursday, while the dollar slipped as global investors assessed that strong US inflation data wasn’t worrisome enough to change the Fed’s already hawkish interest rate expectations.
While the US consumer price index rose 7% in the 12 months to December, the largest annual increase in nearly 40 years, investors were reassured by the fact that the jump was not surprising, as the Federal Reserve appears ready to raise interest rates as soon as possible. time. March, according to Reuters.
Jim McCafferty, joint head of Asia Pacific equity research at Nomura, said markets in Asia, where inflation pressures have generally been more subdued in major economies, could provide attractive opportunities for hedging risks.
“If you are a global investor and you see very large gains in the US stock market during 2021, if you see inflation as a threat, it could be tempting a lot of investors to reallocate money away from developed stock markets in the West into a mix of developed and developing markets in the East Asia “.
MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.1% higher, after posting its biggest daily gain in a month on Wednesday. Japan’s Nikkei lost 0.87% after rising nearly 2% the previous day.
Australian shares (.AXJO) rose 0.42% while Chinese blue chips slid 0.28%.
The uneven performance in Asia was followed by small gains on Wall Street overnight, with the S&P 500 up 0.28% and the Nasdaq Composite up 0.23%. The Dow Jones Industrial Average rose 0.11%.
The People’s Bank of China is set to unveil more accommodating steps to support slowing growth, although it is likely to avoid aggressive rate cuts, policy insiders and economists.
The comments underscore the difference in economic and political outlook between the world’s two largest economies.
While longer-term US yields slipped after inflation data on Wednesday, Fed fund futures set nearly four rate hikes this year. Some analysts say there is still room for a rate hike schedule.
“Our outlook for continued cyclical price pressures means we believe the Fed will continue to tighten policy through 2023 by more than investors currently expect,” Jonathan Petersen, markets economist at Capital Economics, said in a note, adding that he expects the US 10-year yield to reach 2.25% by the end of the year, and 2.75% by the end of 2023.
On Thursday, the US 10-year bond yield rose to 1.7499% after falling on Wednesday to close at 1.725%. The policy-sensitive two-year yield rose to 0.9229% from Wednesday’s close of 0.907%.
Wednesday’s drop in Treasury yields hit the dollar, which fell below key support levels on Thursday. The dollar index was last down 0.05% to 94.963, while the dollar rose against the yen to 114.60.
The euro was little changed at $1.1443.
Oil prices fell, a day after hitting their highest levels in nearly two months on the back of a weak dollar, dwindling supply, and as investors bet the spread of the novel coronavirus variant from Omicron will have a relatively limited economic impact.
Global benchmark Brent crude fell 0.07% to $84.61 a barrel, and US West Texas Intermediate crude fell to $82.58 a barrel.
Spot gold settled at $1,824.54 an ounce.
HF