Markets track higher as investors await US inflation data

Asian and European markets mostly rose Tuesday after an Easter break that thinned trading volumes in the region, with focus now turning to the release of US inflation data later in the week.

The consumer and wholesale price reports due follow Friday figures that showed a continued healthy rise in jobs creation, reinforcing expectations of another Federal Reserve interest rate hike next month.

But the jobs report also soothed concerns that the world's top economy was slowing too fast and could be on course for a recession, after last week's sub-par manufacturing and services sector activity numbers.

However, analysts warned that the 236,000 jobs announced Friday could mark the last report to top 200,000 for some time and that it could turn negative within months.

"It does appear the US payrolls have seemingly steadied the ship after the market got a bit out-of-step with, or at least over-extrapolating, an imminent recession from the gloomy... data last week," said SPI Asset Management's Stephen Innes.

Wall Street provided a broadly positive lead, with all three main indexes recovering from early deep losses. The Dow and S&P 500 chalked up gains though the Nasdaq finished marginally lower.

Still, most of Asia enjoyed an upbeat day.

Tokyo, Seoul and Sydney rose more than one percent while there were also gains in Hong Kong, Singapore, Seoul, Mumbai, Wellington, Taipei and Bangkok, though Shanghai and Taipei dipped.

London, Paris and Frankfurt rallied in the morning as trade resumed post-Easter.

- China recovery 'on track' -

 

Data out of China showed consumer prices rose less than expected in March and factory costs dropped, suggesting there remains some weakness in the world's second-largest economy even as it reopens after the lifting of COVID restrictions.

It does, however, provide the People's Bank of China with room to unveil further growth-boosting measures.

The "economic recovery is on track but not strong enough to push up prices", said Zhang Zhiwei at Pinpoint Asset Management.

"This suggests the economy is still running below its potential. There is room for fiscal and monetary policies to boost growth further."

Aside from the US inflation data, investors are also preparing themselves for the start of first-quarter earnings season, with banking titans JPMorgan and Citigroup among those reporting.

The announcements should provide an idea about how big an impact surging inflation and rising interest rates are having on firms' bottom lines.

On currency markets, bets on another Fed rate hike have pushed the dollar higher against its peers in recent days and it has held on to most of those gains this week.

The yen was also weighed down by comments from new Bank of Japan boss Kazuo Ueda that a long-standing loose monetary policy remained "appropriate".

"Japan is currently not in a situation where interest rates need to be significantly raised," Ueda told reporters at his first press conference since taking over.

- Key figures around 0810 GMT -

 

Tokyo - Nikkei 225: UP 1.1 percent at 27,923.37 (close)

Hong Kong - Hang Seng Index: UP 0.8 percent at 20,485.24 (close)

Shanghai - Composite: DOWN 0.1 percent at 3,313.57 (close)

London - FTSE 100: UP 0.5 percent at 7,779.19

Euro/dollar: UP at $1.0897 from $1.0865 on Monday

Pound/dollar: UP at $1.2429 from $1.2384

Euro/pound: DOWN at 87.67 pence at 87.70 pence

Dollar/yen: DOWN at 133.40 yen from 133.59 yen

West Texas Intermediate: UP 0.8 percent at $80.34 per barrel

Brent North Sea crude: UP 0.7 percent at $84.76 per barrel

New York - Dow: UP 0.3 percent at 33,586.52 (close)

 

AFP