Asia stocks rise on soft US CPI.
Most Asian stock markets edged higher on Wednesday after softer-than-expected U.S. inflation data reduced bets of a near-term Federal Reserve rate hike, although escalating Middle East tensions limited broader gains.
South Korea outperformed regional peers, with the KOSPI surging about 7% as heavyweight chipmakers rallied.
SK Hynix (KS:000660) jumped nearly 13% after strong gains in its U.S.-listed American depositary receipts overnight, while Samsung Electronics (KS:005930) climbed around 8% amid reports that the company reviewed plans for an American listing.
Data on Tuesday showed that U.S. headline consumer prices fell 0.4% in June, marking the first monthly decline since the pandemic, while core inflation held at 2.6%, below expectations.
Gold slips as oil rallys.
Gold prices edged lower on Thursday as investors reassessed the inflation outlook after crude prices extended their recent rally, with higher energy costs clouding the outlook for Federal Reserve policy despite softer U.S. consumer inflation data earlier this week.
At 01:15 ET (05:15 GMT), XAU/USD fell 0.6% to $4,028.43 an ounce, while Gold Futures slipped 0.8% to $4,035.50. XAG/USD eased 0.5% to $58.35 an ounce, while XPT/USD edged 0.1% lower to $1,629.89.
Cooling U.S. inflation offers support, but oil clouds the outlook
Gold gave back part of Tuesday’s more than 2% rally, which had been fueled by softer-than-expected U.S. inflation data that prompted investors to dial back expectations of an immediate Federal Reserve rate increase.
June’s CPI report marked the first monthly decline in consumer prices since 2020, helping push Treasury yields and the U.S. dollar lower as markets reduced bets on near-term monetary tightening.
Oil rally keeps Fed path in focus
Oil prices extended gains for a third straight session after President Donald Trump maintained a naval blockade around Iranian ports and warned of further military escalation unless Tehran returns to negotiations, reinforcing concerns over global energy supplies.
Bitcoin rebounds to near $65k.
Bitcoin rose on Wednesday, briefly touching a three-week high as a softer-than-expected U.S. inflation print helped soothe concerns over higher interest rates.
But bigger gains in cryptocurrencies were limited by continued uncertainty over the U.S.-Iran war, as both sides launched more attacks and signaled few plans for de-escalation.
Bitcoin rose 3.7% to $64,938.1 by 02:00 ET (06:00 GMT), briefly hitting an intraday high of $65,055– its highest level since June 22.
Bitcoin recovers after soft CPI cools rate hike bets
Bitcoin extended gains from Tuesday as softer-than-expected U.S. consumer price index data helped ease concerns that an interest rate hike by the Federal Reserve was imminent.
Fears of higher rates had been a major weight on non-yielding, speculative assets like crypto in recent weeks, given that they increase the opportunity cost of investing in the sector over government debt.
Still, overall gains in crypto were limited by caution over higher rates in the longer term. Fed Chair Kevin Warsh, in his first ever Congressional testimony, reiterated the central bank’s commitment to its 2% annual inflation target.
Warsh’s testimony, coupled with recent hawkish comments from other Fed officials, indicated that the central bank still maintained a tightening bias. A resurgence in U.S. inflation– especially in the face of renewed oil supply disruptions in the Middle East– could once again see rate hike fears creep back into markets.
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