CPI Cools, Asia Immediately Accelerates!
Asian stock markets strengthened after lower-than-expected US inflation data came out. This slowdown in inflation has made markets feel more reassured as the likelihood of the Fed raising interest rates in the near future is starting to recede.
The MSCI Asia Pacific Index rose 1.2%, with South Korea's Kospi leading the gains after jumping 6%. Technology stocks also led the gains, particularly after SK Hynix rose 10% in Seoul, following a 27% surge in the company's US ADRs.
Positive sentiment in Asia followed Wall Street's gains. The S&P 500 rose after major banks posted solid results, while the Nasdaq 100 was boosted by a rally in chip stocks. Meanwhile, IBM plunged 25% after posting sales that fell short of market expectations.
The US bond market also moved positively after CPI data showed consumer prices fell for the first time in six years. Treasury yields fell as traders began to unwind bets that the Fed would raise interest rates in July. The US dollar weakened sharply, while gold rose more than 1% to above US$4,050 per troy ounce.
However, the risk has not completely disappeared as oil prices remain high. WTI rose about 1% to near US$80 per barrel after the US reimposed a naval blockade on ships entering and leaving Iranian ports. New US attacks on Iran also maintained market concerns about global energy supplies.
Impacting the market, the cooler CPI data provided a boost for Asian stocks, gold, and risk assets. However, the conflict in Iran and rising oil prices could still revive inflation risks. So, the market is indeed feeling some relief, but it is not yet completely safe from interest rate and geopolitical pressures. (asd)
Source: Newsmaker.id
