Asian equities saw broad gains on Thursday, following a soft US inflation report that buoyed investor sentiment, though global trade concerns continued to loom large. Japanese and South Korean stocks rose, while Chinese and Hong Kong markets posted mixed results. Futures for US stocks climbed in early Asian trading, continuing the positive momentum from the previous session. Despite Wednesday’s gains in the S&P 500 and Nasdaq 100—marking the first uptick for US benchmarks since Friday—the indexes remained over 3% down for the week.
Treasuries showed little reaction to the US inflation data on Wednesday, with the US 10-year yield rising by three basis points to 4.3%, and the two-year yield climbing four basis points. Major currencies held steady, with the dollar index barely changing.
The lack of significant movement in Treasuries and the muted response to inflation data reflected ongoing uncertainty, particularly stemming from President Donald Trump’s trade policies, which continue to create volatility in global markets.
“Every other day, there’s news out of the US or China that introduces a lot of volatility,” said Christina Woon, portfolio manager at Eastspring Investments, in an interview with Bloomberg Television. She noted that the optimism surrounding US exceptionalism at the start of the year has faded, and the outlook is now “skewing a bit more favorably towards Asia and China, in particular.”
US consumer price index (CPI) data showed a 0.2% rise in February, in line with expectations but below the 0.3% consensus forecast. The core CPI, excluding food and energy, also rose by 0.2%. The softer-than-expected inflation figures provided some relief amid concerns that tariffs could drive up costs for American consumers. However, uncertainty remains, with trade policy developments continuing to cloud inflation expectations.
Oscar Munoz and Gennadiy Goldberg at TD Securities suggested that the Federal Reserve is unlikely to adjust its policy guidance in response to the inflation data. They noted that the outlook for inflation remains unclear due to ongoing trade policy uncertainty.
Thursday will bring additional economic data, including the US producer price index (PPI), which will provide further insights into inflationary pressures.
Global Trade Concerns Escalate
Trade tensions remained a significant concern as President Trump warned of further escalation in the global trade war. On Wednesday, Trump announced that the US would respond to the European Union’s countermeasures against the new 25% tariffs on steel and aluminum, increasing the risk of further retaliation. Earlier in the day, Canada had unveiled new tariffs on $20.8 billion worth of US-made products, including steel and aluminum, after the US implemented its own tariffs.
US Market Update
US equities received a boost from mega-cap tech stocks, with the “Magnificent Seven” group rising 2.3%, marking its best day since January. In late trading, Intel Corp. announced the appointment of industry veteran Lip-Bu Tan as its new CEO, while Adobe Inc. offered a cautious earnings outlook.
“Stocks are rebounding from extreme oversold conditions over the past week,” said Jonathan Krinsky, chief market technician at BTIG. “While I think we’ve reached a tradable bottom, I don’t believe it’s the final bottom.”
Asian Economic Data and Market Moves
In Asia, key data releases included consumer confidence in Thailand, industrial production, and producer prices in Hong Kong. India’s trade data is expected by March 17, while China’s money supply data is due by March 15.
Meanwhile, Chinese authorities summoned Walmart executives after reports surfaced that the retail giant had asked suppliers to absorb costs from higher US tariffs.
In commodities, gold held steady around $2,934 per ounce, while West Texas Intermediate oil edged higher, extending gains into a third consecutive session.
Currencies and Bonds
The yen remained stable, while officials from the Bank of Japan indicated that there were multiple reasons against intervening in the bond market, despite benchmark yields hitting their highest levels since 2008.
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