SYDNEY- Asian shares edged higher but held their recent trading range on Thursday as investors focused on US inflation data and the risk of an upside surprise that could prompt the Federal Reserve to start tapering its massive stimulus.
MSCI’s broadest index of Asia-Pacific shares outside Japan were marginally higher at 700.6 points, but stayed in the 698-712 points range it has traded in since late May.
Japan’s Nikkei and Australia’s benchmark shares rose 0.4 percent each. Chinese shares gained with the blue-chip index up 0.9 percent
Overnight, fixed income markets were the big movers, with some analysts pointing to a setback to more US stimulus efforts, while others suggested a likely clearing out of short positions ahead of the May CPI.
Short positions in Treasuries were the highest since 2018, according to JP Morgan positioning data last week.
The yield on benchmark 10-year US Treasury notes slipped to 1.4891 percent from 1.528 percent late on Tuesday. A fall below 1.47 percent would take yields to the lowest since March 4.
Also at play was some thought that hedge funds may have shifted their bond allocation, driven by lower volatility in the bond market recently, analysts said.
On Wall Street overnight, the S&P 500 came within a whisker of its all-time high set in May as big tech rallied along with healthcare stocks, but finished 0.1 percent lower. The Dow slipped 0.44 percent and the Nasdaq Composite fell 0.09 percent.
Markets are looking to the European Central Bank (ECB)policy meeting later in the day where it will likely keep its policy guidance unchanged and publish updated euro area macroeconomic projections. – Reuters
