Asian equites pared losses moderately on Wednesday weighing on Chinese inflation data.
Shares in Mainland China and Hong Kong edged higher while South Korea and Japan inched down.
The Chinese data showed factory-gate prices rose 8%, faster than expected. The US consumer-price index later is expected to moderate but expected to stay above 8%. Disruptions linked to Russia’s war in Ukraine and China’s outbreak are stoking the cost of living.
Treasury yields were little changed and a dollar gauge remained near the highest level since 2020 as investors parsed Federal Reserve comments.
A high U.S. inflation “will give the Fed license to raise rates even faster” and would be very bad for technology stocks, Ellen Hazen, chief market strategist at F.L. Putnam Investment Management Co., said on Bloomberg Television.
Fed officials reinforced Chair Jerome Powell’s message that half-point hikes are on the table in June and July. But Cleveland Fed President Loretta Mester told Bloomberg Television that “we don’t rule out 75 forever,” referring to a more aggressive, three-quarter-point increase.
The “bar is low” for a surprise from the US inflation data amid ebbing consumer sentiment, according to Brent Schutte, chief investment strategist at Northwestern Mutual Life Insurance Co.
“Things are going to be just a bit better at the margin,” he said. “The Fed overall is going to tighten less. That will lead to a market that begins to find its feet and move higher in coming quarters as inflation does come off the boil.”
Crude oil edged higher with the WTI trading around $101 a barrel and the Brent trading around $103 a barrel.
