Asian Markets Tread Water as Investors Brace for US Inflation Data

Economists surveyed by The Wall Street Journal project a 3.6% annual increase in US inflation for September, a step up from the 3.4% recorded in August. Analysts at MUFG and Infinox suggest this figure will serve as the litmus test for whether the market’s current pivot away from an October rate hike is justified. A stronger print could cement expectations for a December move, pushing yields higher and pressuring equity valuations, which typically suffer under increased borrowing costs.

Regional sentiment remains tethered to Chinese trade performance and central bank support, even as import slowdowns stir anxiety over local demand. South Korea’s Kospi climbed 1.3% and Japan’s Nikkei 225 gained 0.5%, while Hong Kong’s Hang Seng slipped 0.1%. Meanwhile, Singapore’s FTSE Straits Times Index remained flat after the Monetary Authority of Singapore unexpectedly maintained its current monetary-policy settings, defying consensus predictions of a third consecutive tightening. Beyond equities, energy markets reacted to escalating Middle East tensions, driving both West Texas Intermediate and Brent crude futures up by 1.2%.