NEW YORK ⸺ Asian stocks were set to open slightly higher, following Wall Street’s momentum, after a report on U.S. consumer prices calmed concerns about inflation, helping steer the Dow Jones Industrial Average to a record close.
Japan’s Nikkei 225 futures added 0.02%. Hong Kong’s Hang Seng index futures rose 0.03%.
Australia’s S&P/ASX 200 index gained 0.12% in early trading. E-mini futures for the S&P 500 rose 0.24%.
“I do think we’ll see good support for Asian markets today across the region,” said Michael McCarthy, chief markets strategist at CMC Markets. “The reflation trade is back on. We saw bonds and stocks rallying together and a slight easing in the U.S. dollar, which also indicates improving sentiment.”
The U.S. Labor Department said its consumer price index rose 0.4% in February, in line with expectations, after a 0.3% increase in January. Core CPI, which excludes volatile food and energy components, edged up 0.1%, just shy of the 0.2% estimate.
While analysts largely expect a hike in inflation as vaccine rollouts lead to a reopening of the economy, worries persist that additional stimulus in the form of a $1.9 trillion coronavirus relief package set to be signed by U.S. President Joe Biden could lead to an overheating of the economy.
The House of Representatives gave final approval on Wednesday to the bill, one of the largest economic stimulus measures in U.S. history.
U.S. Treasury yields slid Wednesday after an auction of benchmark 10-year notes that showed tepid demand with lower-than-average bid-to-cover ratio.
Benchmark 10-year notes last fell 2/32 in price to yield 1.5265%, from 1.52% late on Wednesday.
Investors will now eye an auction of 30-year debt on Thursday, seeking to cover massive shorts. A weak seven-year auction in late February helped fuel inflation concerns and sent yields higher.
The fall in the 10-year yield after the auction wasn’t enough to help the tech-heavy Nasdaq, which lagged both the Dow and the S&P 500 after its strong move on Tuesday, as investors stayed with names expected to benefit from the economic reopening like financials.
The Dow Jones Industrial Average rose 1.45% to a record closing high, the S&P 500 gained 0.60% and the Nasdaq Composite dropped 0.04%.
Europe’s main index hovered near pre-pandemic highs.
MSCI’s gauge of stocks across the globe gained 0.09%.
Gold erased earlier losses to hit a one-week high on Wednesday, as U.S. Treasury yields eased.
Spot gold prices rose $0.1234 or 0.01%, to $1,726.17 an ounce. U.S. gold futures settled 0.3% up at $1,721.80.
The dollar moved lower following the economic data.
The dollar index fell 0.21%, with the euro down 0.01% to $1.1924.
Oil prices resumed their climb after two days of declines, after the Energy Information Administration reported a bigger-than-expected storage build.
U.S. crude futures settled at $64.44 per barrel, up 43 cents or 0.67%. Brent crude futures settled at $67.90 per barrel, up 38 cents or 0.56%.
Reporting by Matt Scuffham; Editing by Sam Holmes; Reuters