The report is expected to show that prices rose 0.4% last month, for a 7.2% gain from one year ago
Wall Street indexes extended the advance overnight, with technology and communications stocks leading the way higher. US stock market closed its best day in the month to date. Facebook-parent Meta has finally bounced more than 5% after plunging last week. As for other stocks, shares of Chipotle gained over 10% amid strong quarterly numbers. The Nasdaq Composite jumped 2.08%, the S&P 500 gained 1.5%, and the Dow Jones Industrial Average rose 0.86%.
Asian equity markets were mixed-to-lower on Thursday as investors took a more cautious approach amid uncertainty around the outlook for inflation.
MSCI’s broadest index of Asia-Pacific shares eked a 0.10% gain. Japan’s Nikkei 225 inched up 0.30, while South Korea’s Kospi inched up less than 0.1%. China’s Shanghai Composite shed 0.16%. On the data front, Japan’s PPI for January hit the highest levels in 36 years, while Australia’s consumer inflation expectations increased for February. Meanwhile, Bank of Japan Governor Haruhiko Kuroda said he sees the limited possibility of a major inflation surge. He also added that it’s premature to debate an exit from the easy policy during his remaining term as BOJ governor.
Elsewhere, world bond yields continued to ease from multi-year highs and the dollar keeps treading water ahead of the closely watched US inflation report due later in the day. The data should offer new clues on the pace of US interest rate hikes. The report is expected to show that prices rose 0.4% last month, for a 7.2% gain from one year ago. The benchmark 10-year Treasury note traded near 1.945% after touching 1.97% earlier in the week.
Lower yields coupled with mostly positive risk sentiment have put the greenback under some pressure while also staying within limited ranges in most currency pairs. EURUSD has been struggling to hold above the descending 100-DMA since the start of the week. The common currency is holding just above the 1.1400 figure that represents the immediate support ahead of US inflation data. Should the figures reveal another jump in consumer prices, the pair may plunge towards the 20-DMA, currently at 1.1330. However, it looks like the data will fail to inspire USD bulls.