Australia CPI inflation, economic growth, currencies

SINGAPORE — Asia-Pacific stocks traded mixed on Wednesday ahead of Australia’s inflation report and investors are eagerly awaiting the Fed’s policy decision.

Japan’s Nikkei 225 slipped 0.19%, while the Topix index fell 0.1%.

In Australia, the S&P/ASX 200 gained 0.23%.

South Korea’s Kospi recovered from slight losses to rise slightly, and the Kosdaq advanced 0.53%.

MSCI’s broadest index of Asia-Pacific stocks outside of Japan was about flat.

Inflation data from Australia is due Wednesday and is expected to rise to 6.2% in the second quarter from 5.1% in the first quarter.

We expect any impact to the AUD from today’s CPI to be short-lived as the darkening global outlook weighs more heavily on the AUD.

Kristina Clifton

Economist, Commonwealth Bank of Australia

ANZ Research in a Wednesday note said it expected headline inflation to accelerate to 6.6% from a year ago.

“We believe the risks are more balanced for this stronger outlook given continued upside inflation surprises around the world,” the note said. CPI in the US and UK exceeded expectations this month.

Kristina Clifton, an economist at Commonwealth Bank of Australia, wrote in a note that the falling CPI could influence market expectations for future rate hikes.

“We expect any impact to the AUD from today’s CPI to be short-lived as the darkening global outlook will weigh further on the AUD,” she wrote.

The International Monetary Fund on Tuesday revised down its global GDP forecast for 2022 and 2023. It now expects growth to stand at 3.2% this year, down 0.4 percentage points. than its April projection.

The Australian dollar stood at $0.6946 at the start of trading in Asia.

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US stocks fell overnight after Walmart cut its profit forecast.

The Dow Jones Industrial Average slipped 228.50 points, or 0.71%, to 31,761.54. The S&P 500 fell 1.15% to 3,921.05, while the Nasdaq Composite fell around 1.87% to 11,562.57.

The Federal Open Market Committee began its meeting on Tuesday in the United States and will continue on Wednesday.

Expectations for a 75 basis point move were 75.1%, according to CME Group’s FedWatch tool.

In corporate news, chipmaker SK Hynix reported 56% growth in operating profit to 4.2 trillion Korean won ($3.2 billion) in the second quarter of 2022 from a year ago. one year old. Revenue jumped 34% to 13.8 trillion won, helped by “the continued rise in the US dollar,” the company said in a statement.

But SK Hynix predicted that memory demand will slow in the second half as PC and smartphone shipments are expected to be lower than originally forecast.

Shares of the company last rose 0.5%.

Automaker Mitsubishi Motors and miner Rio Tinto are also expected to report earnings.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 107.133, higher than Tuesday’s levels.

The Japanese yen was trading at 136.95 to the dollar.

Oil futures rose in Asian trading. US West Texas Intermediate crude futures rose 0.61% to $95.56 a barrel, while Brent crude futures climbed 0.31% to $104.72 a barrel.

—CNBC Tanaya Macheel, Sarah Min and Karen Gilchrist contributed to this report.

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