Hang Seng Index, ASX 200, Nikkei 225: Markets Brace for US CPI Impact

US Equity Markets: US Inflation and Fed Speakers

Overnight inflation figures from the US will set the tone for the Asian Thursday session. The US annual inflation rate accelerated from 3.2% to 3.5%, with the core inflation rate remaining steady at 3.8%. Economists forecast annual and core inflation rates of 3.4% and 3.7%, respectively.

The hotter-than-expected inflation numbers impacted bets on a June Fed rate cut. Moreover, sticky inflation could increase speculation of a Fed rate hike.

10-year US Treasury yields surged 4.08%, closing the Wednesday session at 4.544%. On Wednesday, the Nasdaq Composite Index declined by 0.84%. The  Dow and the S&P 500 saw losses of 1.09% and 0.95%, respectively.

Asian Economic Calendar: China Inflation in the Spotlight

On Thursday, inflation figures from China also warrant investor attention. Producer and consumer price figures for March could give investors a view of the demand environment. Producers reduce prices as demand weakens, reducing costs to consumers.

Economists forecast producer prices to fall 2.8% year-on-year after declining 2.7% in February.

Decreasing consumer spending trends could dampen consumer price inflation.

Economists expect consumer prices to increase by 0.4% year-on-year after rising 0.7% in February.

The inflation numbers could impact buyer demand for ASX 200 and Hang Seng-listed stocks. It is worth noting that demand during the Chinese Lunar New Year influenced consumer and producer price trends in February.

Commodities: Crude Oil, Gold, and Iron Ore

Commodity prices will need investor consideration. Commodity price movements may influence buyer appetite for ASX 200-listed stocks and market risk sentiment.

On Wednesday, Crude oil trended higher on Middle East concerns. However, gold pulled back as investors reacted to the US CPI Report. Iron ore prices were lower on Wednesday. Fitch Ratings revised the outlook for China to ‘negative,’ impacting real estate stocks and iron ore prices.

The USD/JPY, the Intervention Zone, and the Nikkei

The USD/JPY sat well within the intervention zone at 153.029 on Thursday. 152 was the line in the sand. The markets expect the Japanese government to intervene above the 152 barrier. A stronger Yen could affect buyer appetite for Nikkei-listed export stocks.

The Futures Markets

On Thursday, the ASX 200 and Nikkei were down by 65 and 380 points, respectively.

ASX 200

The ASX 200 advanced by 0.31% on Wednesday. Mining stocks contributed to the gains as investors reacted to the Tuesday upswing in iron ore prices. The S&P ASX All Technology Index (XTX) gained 0.12%. However, gold stocks (XAU/USD) saw losses, while bank and oil stocks had a mixed session.

Rio Tinto Ltd. (RIO) and BHP Group Ltd (BHP) rose by 1.91% and 0.73%, respectively. Fortescue Metals Group Ltd. (FMG) increased by 1.90%.

ANZ Group Holdings Ltd. (ANZ) and Commonwealth Bank of Australia (CBA) saw losses of 0.10% and 0.79%, respectively. National Australia Bank Ltd. (NAB) and Westpac Banking Corp. (WBC) ended the session flat.

Woodside Energy Group Ltd (WDS) declined by 0.89%, while Santos Ltd (STO) gained by 0.65%.

However, gold stocks Northern Star Resources Ltd. (NST) and Evolution Mining Ltd (EVN) declined by 1.51% and 0.76%, respectively.

Hang Seng Index

On Wednesday, the Hang Seng Index rallied 1.85%. Tech stocks and property stocks extended their gains from Tuesday. The Hang Seng Tech Index (HSTECH) and Hang Seng Mainland Properties Index (HSMPI) advanced by 2.12% and 0.80%, respectively.

Tencent (0700) and Alibaba (9988) surged 3.02% and 4.89%, respectively.

Bank stocks had a positive session. HSBC (0005) and Industrial Commercial Bank (1398) rallied 1.41% and 1.49%, respectively. China Construction Bank (0939) ended the day up 0.82%.

The Nikkei 225

(Graph for reference purposes only)

The Nikkei ended Wednesday down 0.48%. Intervention threats tested buyer demand for Nikkei-listed stocks.

Bank stocks had a negative Wednesday session. Sumitomo Mitsui Financial Group Inc. (8316) and Mitsubishi UFJ Financial Group Inc. (8306) fell by 0.63% and 0.74%, respectively.

Nevertheless, it was a mixed session for the main components of the Nikkei.

Fast Retailing Co. Ltd. (9983) and KDDI Corp. (9433) saw losses of 1.11% and 1.20%, respectively. Softbank Group Corp. (9948) declined by 0.47%.

However, Tokyo Electron Ltd. (8035) and Sony Group Corporation (6758) advanced by 0.77% and 0.62%, respectively.

For upcoming economic events, refer to our economic calendar.