The lack of an urgent policy reaction from China kept the tone gloomy in Asia, as consumer-focused companies led to losses.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.3%, with a 1.3% drop in Hong Kong offsetting gains of 0.6% in Australia and 0.1% in South Korea. “You can sense the probability of a soft landing,” said Tapas Strickland, head of market economics at National Australia Bank in Sydney. “Core inflation is coming down and there’s momentum from the consumer.”
Soft Chinese growth data on Monday and the lack of any urgent policy response kept the mood dreary in Hong Kong, where consumer focussed stocks led to losses.A rally in Europe led global bond markets after ECB governing council member Klaas Knot said hikes beyond next week’s meeting were “by no means a certainty.”
That knocked the euro from 17-month highs and its gains stopped sliding the dollar in its tracks. The common currency was at US$1.2245 in the Asia session. New Zealand inflation came in at 6% year-on-year, which was a slowdown from a reading of 6.7% a month earlier, but drove up the kiwi and two-year swap rates as markets price in rates staying higher for longer.