Asian shares tracked Wall Street higher on Thursday, August 11, 2022, after a softer-than-expected US inflation report encouraged bets of less aggressive rate hikes from the Federal Reserve, while the dollar remained bruised after its biggest plunge in five months, Stella Qiu and Alun John reported for Reuters.
Photo Insert: Both the S&P 500 futures and Nasdaq futures rose more than 0.3% on Wednesday.
US consumer prices were unchanged in July compared with June, when they rose a monthly 1.3%. The July result was lower than expectations due to a sharp drop in the cost of petrol, causing markets to reposition on hopes that inflation was peaking.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.0% in early Asia trade, driven by a 1.2% jump in resources-heavy Australia, a 1.4% gain in South Korea and a 1.2% advance in Hong Kong.
Gains in Chinese shares were more subdued. Blue chips rose 0.5% as new COVID-19 lockdowns in more Chinese cities, including the eastern export hub of Yiwu, dented sentiment. Both the S&P 500 futures and Nasdaq futures rose more than 0.3% on Wednesday.
The S&P 500 rose more than 2% during the previous session while the Nasdaq Composite closed 20% above its recent closing low in June.
US Treasuries, which had pulled back from an earlier plunge in yields as traders reassessed the Fed's rate path, were not trading in early Asia on Thursday due to a holiday in Japan. Slowing US inflation may have opened the door for the Federal Reserve to temper the pace of coming interest rate hikes.
Traders now price in a 50 basis point rate hike next month, compared with the 75 basis point increase that had been expected before the inflation report.