(Bloomberg) -- Stocks in Asia edged up Wednesday and oil held losses in cautious trading shaped by a dimming economic outlook and the countdown to US data that may show inflation hit a fresh four-decade high.
MSCI Inc.’s regional share gauge made modest gains amid a climb in Japan and mixed performance in China and Hong Kong. US futures wavered and European contracts retreated after a near-1% Wall Street drop led by tech and energy.
In Taiwan, stocks rallied after authorities pledged to prop up domestic shares for the first time since the the early days of the pandemic.
Treasuries were steady and a key part of the yield curve remains inverted, a potential signal of recession ahead. The 10-year yield at one point Tuesday was 12.4 basis points below the 2-year rate, a level unseen since 2007.
Rapidly tightening monetary policy in the US and elsewhere to fight price pressures is fueling worries about growth and leaving markets nervous. South Korea became the latest nation to hike interest rates further.
Oil held a tumble to about $95 a barrel. The dollar was at the highest level since March 2020. The euro remained in sight of parity with the greenback for the first time in two decades. Bitcoin slipped toward $19,000.
Economists project US inflation likely hit a pandemic peak in June that will keep the Federal Reserve geared for another big interest-rate hike. The consumer-price index probably rose 8.8% from a year earlier, the largest jump since 1981, according to a Bloomberg survey ahead of the release Wednesday.
“This is widely expected to be a really strong print,” Lauren Goodwin, economist and portfolio strategist at New York Life Investments, said on Bloomberg Television. “Even if it is not, I don’t think that changes the Fed’s perspective in a couple of weeks. We won’t have enough evidence that inflation is convincingly turning over.”
The International Monetary Fund cut its growth projections for the US economy and warned that a broad-based surge in inflation poses “systemic risks” to both the country and the global economy.
Traders are also on tenterhooks for the latest corporate earnings and monitoring for a brewing energy crisis in Europe if Russia cuts off gas supplies in the fallout from its invasion of Ukraine.
What to watch this week:
- Earnings due from JPMorgan, Morgan Stanley, Citigroup, Wells Fargo
- New Zealand rate decision, Wednesday
- US CPI data, Wednesday
- Federal Reserve Beige Book, Wednesday
- US PPI, jobless claims, Thursday
- China GDP, Friday
- US business inventories, industrial production, University of Michigan consumer sentiment, Empire manufacturing, retail sales, Friday
- G-20 finance ministers, central bankers meet in Bali, from Friday
- Atlanta Fed President Raphael Bostic speaks, Friday
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Some of the main moves in markets:
Stocks
- S&P 500 futures were little changed as of 10:52 a.m. in Tokyo. The S&P 500 fell 0.9%
- Nasdaq 100 futures were little changed. The Nasdaq 100 fell 1%
- Japan’s Topix index rose 0.1%
- South Korea’s Kospi index rose 0.5%
- Australia’s S&P/ASX 200 Index fell 0.1%
- China’s Shanghai Composite index was little changed
- Hong Kong’s Hang Seng index added 0.3%
- Euro Stoxx 50 futures lost 0.5%
Currencies
- The Bloomberg Dollar Spot Index rose 0.1%
- The euro was at $1.0028, down 0.1%
- The Japanese yen was at 137.13 per dollar, down 0.2%
- The offshore yuan was at 6.7370 per dollar
Bonds
- The yield on 10-year Treasuries was at about 2.97%
- Australia’s 10-year bond yield fell two basis points to 3.39%
Commodities
- West Texas Intermediate crude was at $95.41 a barrel, down 0.5%
- Gold was at $1,727.30 an ounce