Asian Stocks Drop after Report of US Persistent Inflation as Bond Yields Jump

Stock markets in Asia traded lower on Friday, following losses in Wall Street last night due to persistently and stubbornly inflation data, which should bond yields higher.

As of 9:34 BKK time on Friday, Nikkei slipped 0.10% to 32,460.86, SSEC dropped 0.43% to 3,094.60, Hang Seng Index fell 1.37% to 17,988.65, ASX 200 dipped 0.28% to 7,071.20, Kospi dipped 0.63% to 2,464.21, while IDX Composite gained 0.47% to 6,967.52 points. 

Thailand’s SET Index is closed for holiday.


Yesterday, the official data showed that U.S. consumer prices rose 3.7% year-on-year in September amid rising costs for rent and gas prices, but showed signs that it could slow down, which supported the Wall Street that was expecting the Federal Reserve to not raise interest rates in the November meeting.

The reading was relatively in line with expectations that forecast 3.6% growth in September. Meanwhile, prices grew 0.4% on a monthly basis, just slightly higher than 0.3% expectations from the market.

Core inflation, which excludes volatile food and energy prices, rose 4.1% YoY and 0.3% month-on-month. Both were in line with expectations. Prices of used cars fell in September, but the cost of shelter increased amid high rents. 


This morning, China also reported a flat consumer prices at 0% in September, which was slightly better than a 0.2% growth forecast by Reuters poll. Inflation rose 0.1% in August.

Meanwhile, the Statistic Bureau reported that the producer price index fell 2.5%, a decline for the third month in a row and also the smallest drop in seven months.


The US 10-year Treasury Yield rose from around 4.5% to 4.7% overnight after the inflation report. It was last traded at 4.67% this morning. Meanwhile, the 2-year Treasury Yield also rose from 4.98% to 5.07% overnight, and was last traded around 5.05% this morning.