Asian markets experienced a notable bounce on Thursday, driven by a tech-led rally on Wall Street. The rebound was supported by gains in major indices and a resilient dollar, following U.S. core inflation data that exceeded expectations and diminished hopes for a substantial Federal Reserve rate cut next week.
MSCI's broadest index of Asia-Pacific shares outside Japan rose by 1%, while Japan's Nikkei surged 3%, buoyed by a weaker yen, which retreated from its 2024 high of 140.71 per dollar.
The yen had earlier dropped to 142.95 per dollar but stabilised at 142.40, partly influenced by hawkish remarks from a senior Bank of Japan official advocating for a rate increase to at least 1%.
In European markets, EUROSTOXX 50 futures increased by 1.2%, and FTSE futures rose by 0.9%. Conversely, U.S. stock futures were slightly lower.
U.S. core consumer price index (CPI) data revealed a 0.28% rise in August, surpassing forecasts of a 0.2% increase. This data has significantly reduced the likelihood of a half-point rate cut by the Federal Reserve, with the probability now at just 15%.
Despite the inflation data causing some disappointment on Wall Street, tech stocks provided a boost. NVIDIA, a standout performer, rose 8% following reports that the U.S. government might permit the company to export advanced chips to Saudi Arabia. This positive sentiment extended to regional markets, with Taiwan gaining 2.2% and South Korea up by 1.1%.
Chinese markets were relatively subdued, while Hong Kong’s Hang Seng Index edged up by 0.4%.
In the forex market, the U.S. dollar remained near a four-week high against the euro, which eased to $1.1007, close to Wednesday’s low of $1.1002, the weakest level since mid-August.
Short-dated U.S. Treasuries saw some selling overnight. ten-year yields stood at 3.3291%, while 2-year Treasury yields rose to 3.3193%.
Oil prices rebounded overnight due to concerns over potential production disruptions from Hurricane Francine in the U.S. Brent crude futures held at $70.65 per barrel after a 2% gain, finding support at $68.69, the lowest level in nearly three years.
Gold traded at $2,513.75 an ounce, just below its record high of $2,531.60.
