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MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5 per cent and Japan’s Nikkei jumped 1.54 per cent. — Reuters pic
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HONG KONG, April 13 — Asian shares rose today boosted by US inflation figures that fared better than markets’ worst expectations — and caused US yields to pause their march higher — though Chinese shares remained pressured by Covid-19.
Share market sentiment was also capped by gains in oil and other commodity prices after Russian President Vladimir Putin said that on-and-off peace negotiations “have again returned to a dead-end situation for us”, which also hurt the euro.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5 per cent and Japan’s Nikkei jumped 1.54 per cent.
S&P500 futures gained 0.2 per cent and Nasdaq futures gained 0.57 per cent in Asia trade.
Data published yesterday showed US monthly consumer prices increased by the most in 16-1/2 years in March as war in Ukraine boosted the cost of gasoline to record highs, cementing the case for a 50 basis points interest rate hike from the Federal Reserve next month.
However, monthly underlying inflation pressures moderated as goods prices, excluding food and energy, dropped by the most in two years.
The inflation data sent US yields lower yesterday snapping seven straight sessions of gains, though they regained a little ground late in the day and into early trade today.
The yield on 10-year Treasury notes was at 2.7498 per cent, compared to an over three year peak of 2.836 per cent, before the inflation data.
The two year yield was 2.4362 per cent.
The moves in yields “gave a nod to the rhetoric that US inflation has likely peaked or is very close to it,” said Clara Cheong, a strategist at JPMorgan Asset Management.
“While this is unlikely to change the trajectory of the Fed from hiking 50 basis points in May, if inflation continues on this path there will be less pressure on them to be overly aggressive in the second half of the year.”
“However equity markets gave back gains as oil rose back above US$100 (RM 422.88) barrel as progress in Russia-Ukraine peace talks came to a standstill and China started reopening Shanghai very gradually.”
Brent crude briefly dropped below US$100 earlier this week, but rallied sharply yesterday, and gains continued into Wednesday trade.
Brent crude futures gained 0.38 per cent today to US$105.09 and US West Texas Intermediate rose 0.55 per cent to US$101.12.
Commodities analysts at CBA attributed the gains in oil to Putin’s statement, which also caused agricultural commodities to gain, as “the already small risk that Black Sea supplies might normalise to any degree through mid‑year is likely down to zero.”
Corn futures rose to a one month high and wheat futures reached a three week peak.
Chinese share markets gave back their gains from yesterday afternoon when tourism and consumer goods stocks had jumped on reports that Covid-19 curbs could be eased in some pilot areas.
Chinese blue chips fell 0.7 per cent and Hong Kong lost 0.2 per cent. They were little changed by today customs data which showed China’s exports rose 13.4 per cent in yuan terms year on year in January-March, while imports increased 7.5 per cent.
China reported 26,525 new asymptomatic coronavirus cases and 1,513 symptomatic ones today.
Putin’s remarks were a major driver of currency markets with the euro pinned to a five-week low on and commodity currencies finding support as oil prices rose.
The New Zealand dollar was at US$0.6873 up 0.33 per cent, after the Reserve Bank of New Zealand raised interest rates by a chunky 50 basis points. It briefly rose as high as US$0.6901.
Spot gold edged 0.1 per cent higher to US$1,968 an ounce. — Reuters