U.S. and Chinese CPI data exceeded market expectations. Asian stock markets generally fell on Thursday
The latest data shows that the US CPI is higher than expected, while China's CPI is lower than expected. Affected by this, most Asian stock markets experienced a decline on Thursday.
On Thursday, most Asian stock markets experienced a decline, consistent with overnight Wall Street, as higher than expected US inflation data weakened market expectations for an early rate cut by the Federal Reserve.
As the US Consumer Price Index (CPI) data exceeded expectations, traders reduced their bets on the Federal Reserve's interest rate cut in June, and the US stock market index fell overnight.
After China's CPI fell below expectations in March, the Chinese market also experienced a decline. The CSI 300 Index and Shanghai Composite Index in China fell 0.2% and 0.4% respectively, while the Hang Seng Index in Hong Kong fell 1.4%.
The weak inflation data in China has also affected markets in other regions of Asia, as China is one of the main trading partners of most Asian countries.
The ASX 200 index in Australia fell 0.8%, despite recent improvements in commodity prices, which has limited support for major mining giants. Concerns about China have also dragged down the Australian stock market, as the country has a high level of dependence on China.
The Nikkei 225 index in Japan fell 0.6%, while the Tokyo Stock Exchange Index (TOPIX) fell 0.3%. In addition, the US dollar fell to a 34 year low against the Japanese yen. The Japanese government has stated that it may take intervention measures to boost the yen.
The South Korean KOSPI index fell 0.4%, while the Indian market was closed due to holidays. However, the benchmark Indian stock market index Nifty 50 hit a new high on Wednesday.
The strong CPI data in the United States has seriously affected sentiment towards risk driven markets. These data, combined with the hawkish minutes of the Federal Reserve's March meeting, led to a decrease in market expectations for a 25 basis point rate cut in June. The previous meeting minutes showed that Federal Reserve officials are concerned about the ongoing inflation issue.
According to the FedWatch tool of the Chicago Mercantile Exchange (CME), the market currently expects that the likelihood of interest rates maintaining in June is over 80%, and the likelihood of a rate cut is 17.5%.
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