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Markets are recovering as concerns in the Middle East ease amid US inflation

Markets are recovering as concerns in the Middle East ease amid US inflation

HONG KONG, April 22, 2024 (BSS/AFP) – Asian markets rose on Monday, recouping some of last week’s losses, as concerns about the Middle East faded as traders look ahead to the release of key US inflation data and corporate profits.

With Iran downplaying Israel’s reported attack on the country, which came days after a drone and missile attack by Tehran, tensions cooled between the regional rivals.

While the situation remains tense, the lack of escalation over the weekend gave traders a chance to pick up shares and helped push oil lower.

The gains came despite a largely negative lead from Wall Street, where the Nasdaq lost more than two percent due to heavy selling at tech giants such as Amazon, Apple and Netflix.

Investors are now turning their attention to the personal consumption expenditures (PCE) index, the Federal Reserve’s preferred inflation gauge, which will be released on Friday.

The reading could play a key role in the central bank’s decision on interest rates and comes after a third straight month of better-than-expected consumer price index data.

The disappointing CPI data has dented hopes for a June cut, while traders have scaled back their forecasts for how much the Fed will make this year.

The PCE report will be followed next week by the bank’s policy announcement, which will be studied for clues on the next step.

Several officials have moved to temper expectations for cuts, citing persistent inflation and a still-strong economy and labor market.

Chicago Fed Chief Austan Goolsbee said last week that the fight against rising prices had stalled.

“At this point it is wise to wait and get more clarity before taking action,” he said, warning that returning inflation to the two percent target would likely take longer than initially thought from the bank.

Earnings for major companies including Google parent Alphabet, Tesla and Microsoft are also in play this week, with investors hoping for strong reports to support a recent rise in share prices.

– Key figures around 02:30 GMT –

Tokyo – Nikkei 225: up 0.7 percent to 37,334.97 (pause)

Hong Kong – Hang Seng index: up 2.5 percent to 16,625.93

Shanghai – Composite: up 0.2 percent to 3,072.00 points

Dollar/yen: UP from 154.68 to 154.64 yen on Friday

Euro/dollar: UP from $1.0658 to $1.0667

Pound/Dollar: UP from $1.2373 to $1.2388

Euro/pound: UP from 86.11 pence to 86.13 pence

West Texas Intermediate: down 0.8 percent to $81.58 a barrel

Brent North Sea oil: down 0.8 percent to $86.62 per barrel

New York – Dow Jones: up 0.6 percent to 37,986.40 (close)

London – FTSE 100: up 0.2 percent to 7,895.85 (close)