Asian Stocks Fall As Trump-Fueled Wall Street Rally Pauses Ahead Of Inflation Data
The inflation data due Wednesday is expected to show the overall consumer price index rose 0.2% for a fourth month.
Stocks in the Asia-Pacific region declined in early trade on Wednesday as the 'Trump trade' that powered Wall Street to new highs took a breather ahead of the key inflation data.
Equity benchmarks in Australia and South Korea led the declines during the session opening. The Nikkei was 70 points, or 0.15%, lower at 39,290, while the Kospi was down 12 points, or 0.47%, at 2,471 as of 5:35 a.m.
Stocks in China tumbled over 1% on Tuesday as speculation grew that US President-elect Donald Trump will pick two men for key posts in his administration with track records of criticising China. The underwhelming stimulus after the week-long meeting by the top authority also added to the negative sentiment.
The US treasury 10-year yields rose by 12 basis points to 4.43% on Tuesday with traders now pricing in about two US rate cuts through June, trimmed down from four last week, according to Bloomberg News.
This comes as the inflation data due Wednesday is expected to show the overall consumer price index rose 0.2% for a fourth month. According to Bloomberg projections, the year-over-year indicator is expected to have advanced for the first time since March.
Federal Reserve Bank of Richmond President Thomas Barkin said the economy is in a good place, which has allowed the US central bank to lower borrowing costs.
“The Fed is in position to respond appropriately regardless of how the economy evolves,” he said, with interest rates off their peak but still above their historic lows.
Stocks in the US paused the rally fueled by Donald Trump's victory in the presidential election which took the benchmark gauges to new highs in consecutive sessions.
The S&P 500 and the tech-heavy Nasdaq Composite slipped 0.29% and 0.09%, respectively, while the Dow Jones Industrial Average declined 0.86%.
Meanwhile, Bitcoin neared the $90,000 mark for the first time. The value of the cryptocurrency has risen more than 25% since Nov. 5, and several industry experts are bullish on its future.
After OPEC lowered its forecasts regarding China's slowdown, crude oil prices were headed for their lowest point of the month. Brent crude was trading 0.08% higher at $71.89 a barrel as of 6:00 a.m. IST. West Texas Intermediate was down 0.10% at $68.05.
