Wall Street snapped a four-day winning streak following higher-than-expected September CPI data. The US headline CPI printed at 3.7%, higher than an expected 3.6% due to high energy costs. On a monthly basis, inflation climbed 0.4%, higher than an expected 0.3%. The data sent the US bond yields soaring as markets were pricing “higher for longer interest rates” by the Fed. Notably, the small-cap index, the Russel 200, was hit the most, slumping more than 2%, given the high debt ratio in its components. With the unrest in the Middle East, oil prices face an upside pressure, making markets cautious about the global economic outlook.
In FX, the US dollar index rebounded sharply following the hotter-than-expected CPI data, while commodity currencies, including the Australian dollar and the New Zealand dollar, tumbled against the USD. Gold prices were also pressured by high bond yields, pulling back from a two-week high.
In Aisa, Chinese banking stocks soared after a state fund, Central Huijin Investment, increased its stake in the “Big Four,” boosting the regional markets, with the Hang Seng Index surging nearly 2% on Thursday. Investors will keep an eye on a slew of influential economic data, including China’s CPI, PPI, and Trade Balance, to be released today. The slump on Wall Street is set to pressure on the Asian markets, with futures pointing to a lower open across the APAC. The Nikkei 225 futures were down 0.72%, the ASX 200 futures fell 0.66%, and Hang Seng Index futures were down 2.05%.
Today’s agenda:
China’s CPI, PPI, and Trade Balance for September China’s New Yuan loans and M2 money supply US Prelim UoM Consumer SentimentDisclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.