Investors were looking for clues about the Federal Reserve’s anticipated next moves on interest rates, thus Asian stock markets were lower on Monday ahead of this week’s release of U.S. inflation data for September.
After U.S. stocks concluded the previous session with modest gains, MSCI’s broadest index of Asia-Pacific shares outside of Japan was down 0.4%.
Both the Nikkei stock index and Australian shares experienced losses of 0.25%.
The e-commerce giant Alibaba Group fell 3.1% as a result of the unexpected resignation of outgoing CEO Daniel Zhang from its cloud segment, while the Hang Seng Index in Hong Kong was down 1.4% as a result of falling real estate stocks. Blue-chip CSI300 Index in China increased by 0.37%.
On Wednesday, the US Consumer Price Index (CPI) for the month of August is expected. A Wells Fargo research note predicts that inflation will increase 0.6% month over month in August, bringing the annual rate to 3.6%.
According to the FedWatch Tool from CME Group, investors are pricing in a 93% chance that the Fed will maintain rates at present levels when its next meeting concludes on September 20 but just a 53.5% chance for another pause at the November meeting.
“Hawkish FOMC speakers have indicated that it may be appropriate to hold in September, and we think the committee wants time to digest incoming data,” said ANZ analysts on Monday.
The depth of the economy’s monetary restriction leads us to believe that it will continue to slow down rather than pick up speed going forward.
The yield on the benchmark 10-year Treasury note increased to 4.2939% from Friday’s close in the United States of 4.256%. The two-year yield reached 5.0033% compared to a U.S. finish of 4.984%. It rises as speculators anticipate higher Fed fund rates.
With the consumer price index (CPI) increasing 0.1% from a year earlier in August in China, there was a reduction in the deflationary forces there. That was weaker than the 0.3% fall in July but significantly greater than the consensus prediction of a 0.2% increase in a Reuters poll.
Factory prices in China decreased by the least amount in the previous five months. Following a decrease of 4.4% in July, the producer price index decreased by 3.0% from a year earlier, in line with predictions.
After strikes started at crucial liquefied natural gas (LNG) plants in Australia that produce 5% of the world’s output, the world’s energy markets are also closely monitoring Chevron Corp.’s negotiations with its employees.
Since the beginning of August, when rumours of impending labour unrest first surfaced, European petrol prices have been erratic.
Following Friday’s announcement that strikes will begin after five days of negotiations ended in failure to reach an agreement, petrol prices rose by as much as 14%.
On Monday, the dollar’s value against the yen fell by 0.41% to 147.21. It is approaching the 147.87 high it reached on September 9 of this year.
The euro gained 0.1% on the day to $1.0709 after losing 1.22% in a month, while the dollar index, which measures the value of the dollar relative to a basket of other key trading partners’ currencies, down 0.057% to 104.79.
American crude fell 0.59% to $86.99 per barrel. A barrel of Brent crude dropped by 0.44% to $90.21.
The spot price of gold was $1,918.3663 per ounce, slightly higher.