Markets Overview

  • ASX SPI 200 futures up 0.6% to 8,026.00
  • Dow Average up 0.3% to 40,861.71
  • Aussie up 0.3% to 0.6674 per US$
  • US 10-year yield rose 1.2bps to 3.6553%
  • Australia 3-year bond yield fell 4.5 bps to 3.48%
  • Australia 10-year bond yield fell 5.9 bps to 3.85%
  • Gold spot down 0.2% to $2,511.40
  • Brent futures up 2.1% to $70.67/bbl

Economic Events

  • 10:30: (AU) Australia to Sell A$1 Billion 70-Day Bills
  • 10:30: (AU) Australia to Sell A$1 Billion 154-Day Bills
  • 11:00: (AU) Sept. Consumer Inflation Expectation, prior 4.5%

Stocks in Asia were headed for early gains after a tech rally lifted Wall Street as traders looked beyond elevated core US inflation to imminent rate cuts next week.

Equity futures for Japan, Australia and Hong Kong all advanced, with gauges in Tokyo partly reflecting strength in the yen. The Japanese currency climbed as high as 140.71 per dollar on Wednesday, wiping out its losses for the year. The S&P 500 closed 1.1% higher, while the Nasdaq 100 rose 2.2%. Nvidia Corp. gained 8.2% as chipmakers rallied.

Treasury 10-year yields rose one basis point to 3.66% Wednesday and swaps market pricing cemented expectations for a 25 basis-point Federal Reserve rate cut when the central bank meets next week. Once the Fed begins lowering borrowing costs, the debate will center around the pace of subsequent easing.

The so-called core consumer price index — which excludes food and energy costs — increased 0.3% from July, the most in four months, and 3.2% from a year ago, Bureau of Labor Statistics figures showed Wednesday. The three-month annualized rate advanced 2.1%, picking up from 1.6% in July, according to Bloomberg calculations.

“This isn’t the CPI report the market wanted to see,” said Seema Shah at Principal Asset Management. “The number is certainly not an obstacle to policy action next week, but the hawks on the committee will likely seize on today’s CPI report as evidence that the last mile of inflation needs to be handled with care and caution.”

An index of the dollar fell Wednesday. Oil climbed as Hurricane Francine ripped through key oil-producing zones in the US Gulf of Mexico, prompting traders to cover bearish bets.

Bank of Japan policy board member Naoki Tamura is due to speak Thursday. On Wednesday, another board member Junko Nakagawa said the central bank will continue to adjust policy provided the economy performs in line with projections in comments that sent the yen higher.

Elsewhere in Asia, data set for release includes producer prices in Japan and Hong Kong, inflation and industrial production in India and a rate decision in Pakistan.