(Bloomberg) — Stocks in Asia followed Wall Street higher as investors looked to inflation readings for clues on the path of interest rate hikes.
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A benchmark of Asia equities headed for a sixth weekly gain, the longest such stretch in two years. US futures moved higher ahead of producer price data later Friday and after the S&P 500 notched its first advance this month.
Chinese shares rose as factory-gate prices contracted while consumer inflation eased, giving the nation’s central bank some room to ease policy to foster economic recovery from the impact of the pandemic.
Investors are taking heart from any signs of softness in prices that may allow policymakers around the world to be less hawkish and more supportive of economic growth.
The dollar dropped versus most of its major counterparts, extending Thursday’s move when geopolitics-driven appetite for haven investments faded. The offshore yuan slightly strengthened.
Treasury yields declined, with 10-year rate hovering near 3.45%. Government bond yields also moved lower in Australia while Japan’s benchmark 10-year yield fell by half a basis point.
Oil rose in Asia, but headed for a weekly drop of nearly 10% after a volatile session on Thursday on concerns over economic outlook.
Friday’s US producer price index for November is one of the final pieces of data Federal Reserve policymakers will see before their Dec. 13-14 policy meeting. The PPI in October cooled more than expected. Meanwhile there are some signs the labor market is cooling, with continuing jobless claims climbing to the highest since early February.
Still, strategists from Morgan Stanley to JPMorgan Chase & Co. have warned investors against piling back into risk on hopes the Fed is getting close to pivoting to easier policy.
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JPMorgan Asset Management sees more room for equities to decline from the current levels. “We still think next year it’s going to be a pretty downbeat outlook for the global economy, given all the tightening we have seen so far this year,” Sylvia Sheng, global multi-asset…
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