TOKYO (Reuters) – Most Asian stocks swung lower on Tuesday, weighed by Chinese markets after data showed mainland factory prices shrinking at their fastest pace in three years while reports of German stimulus plans pushed global bond prices down.
China’s producer price index fell 0.8% in August year-on-year, official data showed on Tuesday, its sharpest decline since August 2016 as flagging demand at home and abroad forced some businesses to slash prices.
Data - Chip - Shares - China - %
The data pushed blue chip shares in China down 0.76%, which in turn drove an index of Asian stocks outside of Japan 0.3% lower, having traded flat earlier in the session.
“Globally inflationary pressure remains subdued, so in that sense China is not an outlier,” said Sean Darby, global equity strategist at Jefferies in Hong Kong.
People - Market - Bond - Yields - Markets
“People are positioned very bearish, but I don’t think the market wants to be too bearish. Bond yields are reversing. Markets are a little more unsure about their expectations for central banks, because a lot of easing is already priced in.”
U.S. stock futures were down 0.08% in Asia after the S&P 500 ended flat in New York on Monday. Australian shares were down 0.49%. Bucking the trend, Japan’s Nikkei stock index rose 0.2%.
Investor - Focus - Shifts - Central - Bank
Investor focus shifts to the European Central Bank, which is widely expected to introduce a package of monetary easing and stimulus measures on Thursday to offset the effects of an ongoing U.S.-Sino trade war and a global economic slowdown.
The U.S. Federal Reserve is also widely expected to cut interest rates next week as policymakers race to shield the global economy from risks, which also include Britain’s planned exit from the European Union.
Bond - Yields - Pullback - Nerves - ECB
“Bond yields had fallen so far so fast that they were due for a pullback, and you have some nerves setting in before the ECB,” said Shane Oliver, head of investment strategy and...
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