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What happened
Asian equities bounced back Wednesday morning, snapping a two-session losing streak as cheaper crude and steadier bonds gave risk appetite a lift ahead of the US August PCE inflation report. Japan’s Nikkei 225 climbed 1.56%, the broader Topix added 0.91%, South Korea’s Kospi rose 0.65%, and the MSCI Asia Pacific Index gained about 0.4%. Hong Kong futures bucked the trend, with Hang Seng futures pointing 0.3% lower.
Oil provided some of the relief. Brent held near $103 a barrel after falling 2.6% on Tuesday, while WTI traded around $89.10 to $89.52. Saudi Arabia restored roughly half of the East-West pipeline capacity, and Trump denied reports of any Iran sanctions relief, keeping supply risks on traders’ radar.
Gold, meanwhile, is ending the month on a heavy note. Spot gold steadied at $4,180.30 an ounce on Wednesday but remains on track for a 6% monthly decline as rate-hike expectations weigh on the metal. Silver changed hands at $61.07, platinum at $1,703.19, and palladium at $1,220.61.
- Nikkei 225: +1.56% | Topix: +0.91% | Kospi: +0.65%
- MSCI Asia Pacific: ~+0.4%; Hang Seng futures: -0.3%
- Brent crude: ~$103/bbl after Tuesday’s 2.6% slide; WTI $89.10-$89.52
- Spot gold: $4,180.30/oz, headed for a 6% monthly drop
- August PCE report due Wednesday at 8:30am ET
Why it matters
The August PCE is the Fed’s preferred inflation gauge, and it is the number that decides where rate-hike pricing goes from here. Traders currently see a 47% chance of an October hike and roughly 92% odds by December, while NY Fed President Williams says policymakers likely need only one more hike this year. A soft print would pull those odds back and give risk assets room to breathe.
A cool reading could be the catalyst gold needs to stabilize back toward $4,200-$4,300 and drag Treasury yields lower. A hot one would keep the 10-year near 5.25%, pressure equities, and keep the yen pinned near 157.36 per dollar — with the offshore yuan at 6.7073, Asia FX would feel that too.
What to watch
The PCE lands at 8:30am ET. Watch the immediate reaction in US futures and Treasuries, then the full US session for confirmation. After that, Micron reports Wednesday night and payrolls hit Friday — a one-two that will decide whether this bounce has legs or fizzles into another bout of hike repricing.
Related reading: China Cuts Key Lending Rate and Launches First Nationwide Mortgage Subsidy to Spur Growth | Trump Weighs Red-Dyed Diesel Sales Instead of Export Ban Ahead of Midterms
Do you expect Wednesday’s PCE to print hot or cool — and would a surprise change your call on an October hike?
Sources: Morningstar, TradingView, Reuters
Auto-posted by the Bull Lounge news desk.
Not financial advice.
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