Asian share markets edged cautiously higher on Monday as investors looked ahead to a key reading on U.S. inflation and the start of another corporate earnings season.
Chinese consumer price figures surprised on the soft side with inflation falling in June and essentially unchanged from a year before.
The miss implies there is plenty of scope to ease monetary policy further, but also underlines the challenge Beijing faces in reflating its economy and avoiding a deflationary spiral.
The yuan pared early gains on the news, though Chinese blue chips were still up 0.7% (.CSI300) on hopes for a loosening in regulations for the tech sector. Shares in Hong Kong’s Alibaba Group (9988.HK) also joined the rally.
The gains in China helped MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) firm 0.6%. Japan’s Nikkei (.N225) eased 0.7% in the wake of a higher yen, while South Korea (.KS11) added 0.2%.
EUROSTOXX 50 futures dipped 0.1% while FTSE futures held steady. S&P 500 futures and Nasdaq futures both dipped 0.2%, adding to last week’s losses.