Wall Street extended a three-day winning streak as the US bond yields continued to slide, despite hotter-than-expected PPI. The Producer Price Index rose 0.5% in September from a month ago, higher than an expected 0.3%. The data rose 2.2% on a yearly basis, the highest since April, suggesting another sticky headline CPI due for release tonight. The stock markets initially fell following the data but rebounded after the FOMC meeting minutes showed board members agreed that policy should remain restrictive but needed to “proceed carefully” to balance overtightening with the inflation target. The US 10-year bond yield fell 10 basis points to a two-week low following the Fed minutes release.
The US dollar index fell for the sixth straight trading day due to falling bond yields, while gold benefited from a softened dollar the most. However, crude oil extended losses as geopolitical risk abated after Saudi Arab’s pledge to stabilize the oil markets.
Most Asian currencies were lower against the king dollar following a slide in the respective government bond yields. However, China’s effort for additional debt to support its infrastructure boosted the regional stock markets. Futures point to a higher open across the APAC. The Nikkei 225 futures were up 0.30%, the ASX 200 futures rose 0.16%, and Hang Seng Index futures were up 1.08%.
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