Asian equities subdued ahead of US inflation data, oil prices firm

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Asian equities were subdued on Wednesday, with investors awaiting key US inflation data and an oil price spike that stoked anxiety about persistent price pressures.

MSCI’s broadest index of Asia-Pacific shares outside Japan was flat at 609.80, while Japan’s Nikkei 225 index eased 0.2% to 26,513.89.

Australia’s resource-heavy S&P/ASX 200 index lost 0.7% to 6,615.20, while China’s blue-chip CSI300 index was flat at 3,378.59.

The focus for investors was on the US Consumer Price Index (CPI) report due on Wednesday, which is expected to show that inflation remains elevated. A hotter-than-expected reading could prompt the Federal Reserve to raise interest rates more aggressively.

Oil prices extended gains on Wednesday, with Brent crude futures settling at $92.24 per barrel, nearing a ten-month peak that it hit a session ago on persistent supply concerns. US West Texas Intermediate crude futures were up 0.3% at $89.08.

The euro edged higher and markets moved to favor a rate hike from the European Central Bank (ECB) on Thursday, following a Reuters report that the ECB expects inflation will stay above 3% next year in its updated forecasts.

The US dollar recovered some of its recent losses on the yen, up 0.2% to 147.35 yen after comments from Japan’s top central banker on a possible early exit from its negative interest rate policy sent the yen soaring.

Treasury yields climbed higher on Wednesday, with the two-year note touching 5.0264%, compared with a US close of 5.005%. Ten-year yields held at 4.2881%, up from the close of 4.264%.

The gold price was flat at $1,912.85 per ounce.

Key takeaways:

  • Asian equities were subdued ahead of the release of key US inflation data.
  • The euro edged higher as markets moved to favor a rate hike from the ECB on Thursday.
  • Oil prices extended gains on persistent supply concerns.
  • The US dollar recovered some of its recent losses on the yen.
  • Treasury yields climbed higher.
  • The gold price was flat.

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