Asian Market Steady as Traders Awaits for Inflation Data

Asian stocks were steady Thursday as traders awaits inflation data that would give indication on how aggressive Federal Reserve would be on tightening monetary policy.

Shares in CSI 300, HSI and KOSPI were down by 0.39%, 0.23% and 0.11% respectively while TOPIX is marginally up by 0.05%.

The S&P 500 extended a broad rally overnight and the Nasdaq 100 jumped over 2%.

The 10-year U.S. Treasury yield edged lower in the wake of a strong auction. The gap between two-year and 10-year yields was around the narrowest since October 2020. The dollar ticked higher.

Oil’s rally has stalled around $90 a barrel. Gold was at a two-week high on demand for the metal as a store of value amid concerns over inflation and geopolitical tensions.

U.S. inflation later on Thursday are expected to come out over 7% while a higher reading could trigger a more hawkish Fed incentivizing further volatility into stocks and bonds.

“The market is being somewhat sanguine about what will happen in the second half of 2022,” Sonal Desai, chief investment officer at Franklin Templeton Fixed Income, wrote in a note, as reported by Bloomberg.

“There is an expectation that inflation will decline sharply. I think that might be optimistic because a lot of the factors driving inflation will still be with us. The Fed is already behind the curve.”