Precise Investors


Asia shares near 15-month highs ahead of U.S. CPI

Asian shares

U.S., British and European equity futures were broadly steady, with the FTSE and Europe’s STOXX 600 set to open near record levels

Asian shares hovered near 15-month highs on Tuesday and the dollar was firm ahead of highly anticipated U.S. inflation reading, while Japanese bonds were squeezed as the BoJ retreated a little on its bond buying programme.

U.S., British and European equity futures were broadly steady, with the FTSE and Europe’s STOXX 600 set to open near record levels.

MSCI’s broadest index of Asia-Pacific shares outside Japan touched its highest since early 2023 in morning trade, before settling back to flat. Japan’s Nikkei was headed higher.

Benchmark 10-year Japanese government bond yields added 1 basis point to 0.95%, the highest yield since November, and five-year Japanese yields reached 0.555%, the highest since 2011.

The gap, nonetheless, with U.S. yields remains hundreds of basis points and wide enough to keep the weak yen under pressure.

According to a survey released on Monday by the New York Fed, Americans see inflation a year from now at 3.3%, higher than they did a month earlier, and later on Tuesday U.S. producer price numbers will be closely watched.

The main focus this week is on Wednesday’s actual U.S. consumer price index figures, to see whether some upside surprises in the first quarter were a blip or a worrying trend. Expectations are for core CPI to drop from an annual 3.8% in March to 3.6% for April.

If there was a fourth successive upside surprise, that would probably influence the path of future short term interest rates, according to Nick Ferres, CIO at Vantage Point Asset Management in Singapore.

If inflation does not continue the disinflation path, we fear that policy rates have not reached a peak in this cycle, he added.

Also on Tuesday, Alibaba is expected to report results and Fed Chair Jerome Powell is due to speak at 1400 GMT.

Uber announced a $1.25 billion deal to take over Delivery Hero’s foodpanda business in Taiwan.

Anglo American laid out a strategy update that includes exploring options for its steelmaking coal, nickel and platinum businesses, as it fends off a takeover bid from BHP.

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