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Asian shares track Wall Street losses ahead of US inflation data

Asian shares track Wall Street losses ahead of US inflation data

People walk past a screen displaying the Hang Seng stock index outside Hong Kong Exchanges, in Hong Kong, China July 19, 2022. REUTERS/Lam Yik

Asian shares fell and the dollar steadied on Wednesday (Aug 10) as investors waited for a key US report on inflation to provide hints to the Federal Reserve's plans for future monetary tightening.

The Consumer Price Index (CPI) report will be released later on Wednesday, with markets watching for signs that inflation eased in July despite last week's unexpectedly strong US jobs numbers.

"I don’t think that we are through the bear market woods yet – recession risks loom and I don’t think the Fed is done with its aggressive belt-tightening," said David Chao, a global market strategist for Asia Pacific ex-Japan at Invesco.

"I don’t think markets have fully discounted these variables. This week’s inflation data will certainly give us more clarity of the Fed’s near-term policy outlook."

The slips in Asian markets tracked Wall Street, which closed on Tuesday with all three major indices down.

The S&P 500 fell 0.42 per cent, the Dow Jones Industrial Average dropped 0.18 per cent, and the Nasdaq Composite lost 1.19 per cent.

The dollar reversed losses overnight and was trading flat in Asia. The dollar index, which measures the safe-haven greenback against six major peers, was down 0.009 per cent at US$106.330.

"A strong CPI print this week could mean the Fed is back to its aggressive rate hiking path, which would restrengthen the USD," said Chao.

Source: Reuters/gs

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