SYDNEY (Reuters) – Asian stocks were slightly below a recent three-month high on Thursday with China slightly weaker as investors weighed inflation concerns ahead of key US economic data, while that oil prices rose to highs of almost a year and a half.
MSCI’s broader Asia-Pacific equity index outside of Japan rose 0.3% to 711 points. It rose to 712.57 on Wednesday, a level not seen since early March.
added 0.4%. Australian stocks rose to record highs as investors checked stronger-than-expected economic growth data released on Wednesday.
Chinese stocks were slightly lower.
While stock markets generally remain near record highs, the momentum seen earlier in the year has waned as investors begin to worry that a stronger-than-expected rally from COVID-19 means higher inflation and higher inflation. tightening of monetary policy earlier than expected.
A weekly unemployment report and May private payroll data on Thursday will be followed by monthly employment figures on Friday, and investors will look for signs of an economic rebound and rising inflation.
In addition to inflationary fears, oil prices reached the highest level in a year and a half, driven by the decision of major producing nations to restore supplies only gradually, while the slow pace of nuclear talks between the United States. and Iran also helped.
The US Federal Reserve released its “Beige Book” report, which pointed out labor shortages and inflationary pressures.
Investment managers are also increasingly concerned with the latest BlackRock (NYSE 🙂 founder Larry Fink warning that the market was underestimating the risk of higher inflation.
Philadelphia Fed Bank Chairman Patrick Harker also reiterated his call that “it may be time to at least think about reducing our $ 120 billion in monthly purchases of Treasuries and mortgage-backed securities.”
The Fed has already announced that it would begin to undo the corporate bond holdings it acquired last year to calm credit markets at the height of the pandemic.
In Australia, the central bank is also expected to begin reducing its pandemic emergency stimulus starting next month, when investors believe it will announce that it will not extend its three-year yield target beyond the April 2024 bond.
The major Wall Street indices ended Wednesday’s session on a mixed basis despite an impressive rally in the operator of the cinema chain AMC Entertainment (NYSE 🙂 Holdings, which almost doubled in price on Wednesday, lifting a group of favored stocks. by retail investors on forums like Reddit’s WallStreetBets.
“It looks like the foam is there, particularly on the retail side, which may be part of the wariness seen in the broader stock market ahead of non-farm payrolls on Friday,” said Tapas Strickland, economist at National Australia. Bank (OTC :).
The rise in retail stocks comes as investors remain unconvinced of central bank assurances that the current rise in inflation is transitory.
Movements in the currency markets have been limited and the and other major pairs have remained in tight ranges.
The dollar index, which measures the dollar against a basket of major currencies, was flat at 89,899, not far from the 89,535 hit in five months last week. The Japanese yen barely changed at 109.65 per dollar.
The Canadian dollar and the Norwegian krone have performed better in the last 24 hours thanks to higher oil prices.
At the other end of the ladder, the New Zealand dollar lagged, down 0.2%. It was slightly modified to $ 0.7749.
It rose 24 cents to settle at $ 71.59 a barrel, its highest level since January 2020.
US West Texas Intermediate (WTI) crude rose 25 cents to $ 69.08 a barrel, its highest level since October 2018.