Asian stocks stall, markets eye US inflation signals

By Swati Pandey

SYDNEY (Reuters) – Asian stocks stalled on Thursday as China moved lower, as the US dollar held below an 11-week high as investors reassessed the US Federal Reserve’s statements on the inflation and looked to the data ahead for guidance.

The largest MSCI index of Asia-Pacific stocks outside of Japan rose 0.1% to 695.2 points, after a one-month low of 685.12 hit earlier this week.

The Japanese Nikkei edged up to 28,905.5, while Chinese stocks were in the red with the blue chip CSI300 index down 0.3%.

On Wall Street, the Nasdaq closed at a record high Wednesday, while other major US indices ended lower alongside European stocks.

The market has taken a whiplash over the past week, feeling the aftermath of a surprise projection of rate hikes as early as 2023 by the U.S. Federal Reserve that caused stocks to fall, inflated the dollar and led to the flattening of the dollar. US bond yield curve.

Investors are now anticipating the first full hike in U.S. interest rates for February 2023 compared to December 2022 the day after the Fed meeting.

Overnight, 10-year Treasury yields remained below 1.5% in moderate trading.

“Until bond yields burst sustainably, back and forth, it remains very difficult to determine which direction stocks are heading in the short term,” JPMorgan analysts wrote in a note.

“Much continues to depend on future growth data. “

Europe released strong data on manufacturing activity on Wednesday, while figures for the ISM manufacturing and US non-farm wages are due next week.

The US dollar hovered below an 11-week high against major peers, with traders browsing conflicting signals from Fed officials on when to withdraw monetary stimulus.

Two Fed officials said on Wednesday that a period of high inflation in the United States could last longer than expected, just a day after Fed Chairman Jerome Powell downplayed mounting price pressures .

The dollar index, which measures the greenback against six rivals, stood at 91.806 at the start of the Asian session after plunging to 91.509 on Wednesday. It was at 92,408 at the end of last week, the highest since April 9.

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Against the Japanese yen, the dollar climbed to a 15-month high at 111.11.

The Bank of England is expected to recognize the strength of inflationary pressures in recent data when it meets later today.

“We don’t expect the statement to push back expectations that interest rates could start rising in the second half of next year,” ANZ economists said.

The British pound remained stable at $ 1.3959.

Flash The US manufacturing PMI hit a record level in June, but manufacturers are still struggling to find raw materials and skilled workers, dramatically increasing prices for both businesses and consumers.

Early PMI data showed eurozone business growth accelerated to its fastest pace in 15 years in June thanks to the easing of more foreclosure measures and the unleashing of pent-up demand.

Oil prices hovered nearly two years high after industry report on U.S. crude inventories bolstered prospects for a market tightening as travel resumes in Europe and North America .

Brent crude futures fell 5 cents to $ 75.14 a barrel and US crude fell 5 cents to $ 73.03 a barrel.

Spot gold prices fell to $ 1,776 an ounce.

(Reporting by Swati Pandey; editing by Richard Pullin)