Asia’s markets follow Wall Street’s gains as low US inflation raises rate expectations

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Last Updated on August 11, 2022 by Bitfinsider

Asian markets rose on Thursday as investors exhaled in relief as statistics revealed that US inflation had finally started to decline from a four-decade peak, allowing the Federal Reserve some leeway to slow the rate at which it raises interest rates.

The significant drop in energy prices, along with the lower-than-expected estimate on consumer prices, gave risk assets everywhere a much-needed boost.

While the dollar fell versus its rivals, Wall Street had a rally that saw the Nasdaq gain more than 2% and enter a technical bull market after rising more than 20% from its June lows.

Treasury yields, a measure of potential interest rates, also decreased.

Trading floors were uneasy ahead of Wednesday’s release because many people anticipated a result that above expectations would increase pressure on the Fed to announce another substantial rate hike at its September meeting.

Markets have been falling for months due to worries that the bank’s effort to tighten monetary policy could cause the world’s largest economy to enter a recession. At the time, the mood had already been soured by the Ukraine conflict, supply chain problems, and deteriorating China-US ties.

Hong Kong, Seoul, Taipei, and Manila all had increases of more than 1% as a result of the positive vibe from New York; Shanghai, Sydney, Singapore, Wellington, and Jakarta also saw significant increases.

Although opinions were generally favorable, analysts cautioned against getting overly ecstatic because inflation was still high and would take some time to manage.

In the meantime, Fed representatives were on the streets attempting to cool speculation that they would start lowering borrowing costs as early as next year.

Investors will be waiting for additional statements from policymakers in the coming weeks to get a sense of how quickly interest rates will rise, as the economy is still growing at a good rate and has remained resilient despite increasing borrowing costs and inflation.

As recession fears continued to dampen demand forecasts, oil prices started to decline. Both primary futures are now trading at levels that are lower than they were before to the Ukraine War and around six-month lows.

Data suggesting that US inventories are at their highest levels since December as a result of an increase in domestic production also contributed to the selling. Meanwhile, some shipments from Russia to three European nations restarted after a payment dispute related to the sanctions was settled.


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Hardware wallets are safe and secure devices that can be used offline. They keep your cryptocurrency offline, making it impossible for you to be hacked. To find out more on the leading hardware wallets, you may view our reviews here: Ledger & Trezor
Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.

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