Asian markets drift lower as US inflation data looms
Stocks extended losses in Asia on Wednesday as traders awaited the release of US inflation data, with sentiment clouded by a range of issues including the debt ceiling standoff in Washington and banking sector uncertainty.
After last week’s Federal Reserve interest rate hike and a forecast-beating jobs report, focus is lasered on the consumer price index reading later in the day, which will play a key decision-making role in the US central bank’s June policy meeting.
The Fed hinted at a possible pause in its long-running tightening cycle but observers warned that any sign inflation is creeping up would put pressure on officials to turn the screws further.
And while the world’s top economy continues to show resilience, several indicators suggest it is easing, feeding concerns that it could be heading for a recession.
“Even though investors continue to anticipate the best of both worlds with the medium-term trends around inflation and interest rates falling together, growth is also slowing,” said SPI Asset management’s Stephen Innes.
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