Asian Stocks Rebound With US Inflation Print In Focus For Rate Cut Cues

Asian stocks recovered from Monday's loss to trade higher, ahead of the US inflation print which could provide cues to the size of September rate cuts.

The benchmark indices in Indonesia and Australia led gains, while that of China lagged. The Nikkei 225 was 0.08% higher at 36,244, and the S&P ASX 200 was up 0.59% at 8,035 as of 8:36 a.m.

The rebound in the region comes after a sell-off triggered by economic concerns on whether the Federal Reserve may have waited too long to cut interest rates. The non-farm payrolls rose in August by 1.42 lakh against the expected 1.65 lakh, leaving the three-month average at the lowest since mid-2020.

However, traders will shift focus to the upcoming CPI data in the US due on Sept. 11, hoping that it may aid the Fed in shifting focus to a soft landing.

Traders pared the chance of a half-point rate reduction at the Fed’s September meeting to about 20% from as high as 50% last week, according to Bloomberg.  

China’s trade data will be released on Tuesday while Germany is set to publish CPI data. Analysts will also be eyeing the presidential debate between Donald Trump and Kamala Harris during the day.

Shares of Apple ended little changed after falling 2% as Chief Executive Officer Tim Cook unveiled a new series of iPhones, and Air Pods among other products. The CEO said the iPhone was built for artificial intelligence “from the ground up.” 

The US stocks bounced back on renewed buying with a change in focus to inflation data for clues about the magnitude of the rate cut. A softer inflation will aid the Federal Reserve to change its stance without much worry.

The S&P 500 and Dow Jones Industrial Average rose 1.16% and 1.20%, respectively. The Nasdaq Composite advanced 1.16%.

Meanwhile, oil prices recovered on Monday after dropping to the lowest in over a year last week. Brent crude was trading 0.01% higher at $71.85 a barrel as of 8:16 a.m. IST. Gold was down 0.10% at $2,503.9 an ounce.

• US Dollar Index at 101.67.

• US 10-year bond yield at 3.71%.

• Brent crude up 0.01% at $71.85 per barrel.

• Bitcoin was down 0.66% at $56,644.

• Gold was down 0.10% at $2,503.9 an ounce.