Asian stocks gain before US CPI data, oil climbs

ASIAN stocks rose ahead of key US inflation data as expectations grew that the US Federal Reserve may not need to raise interest rates aggressively in 2027. Crude oil advanced.

MSCI’s Asia Pacific equities index rose 0.6 per cent, rebounding from two days of losses that pushed the gauge to its lowest close since August on Tuesday (Oct 13).

Among the main moves across markets, S&P 500 futures rose 0.1 per cent as at 12.01 pm Tokyo time. Japan’s Topix was little changed, Australia’s S&P/ASX 200 fell 0.7 per cent, Hong Kong’s Hang Seng rose 0.3 per cent and the Shanghai Composite rose 0.2 per cent.

Sentiment improved after New York Fed president John Williams said he saw no need for further tightening in 2027, while continuing to view one more rate hike as appropriate for 2026.

Swaps are pricing in less than a 25 per cent chance of a rate increase in October.

Elsewhere, global crude oil benchmark Brent rose 0.8 per cent to US$106.55 a barrel as a flare-up in Middle East attacks increased uncertainty over a recovery in energy shipments from the Persian Gulf. US crude advanced for a fifth day.

While Williams’ comments offered some relief ahead of the CPI numbers, markets remain concerned that elevated oil prices due to geopolitical conflicts may keep price pressures persistent.

Traders are also looking to US corporate earnings for clues on the direction of the artificial intelligence trade, which has come under pressure amid doubts that billions of dollars in spending will deliver commensurate returns.

“Today’s CPI numbers will be particularly important given the recent sharp swings in expectations for further Federal Reserve rate hikes,” Nick Twidale, chief market analyst at AT Global Markets in Sydney, wrote in a note.

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“A stronger-than-expected inflation print could quickly reignite expectations of further Fed tightening.”

Treasuries broadly held their gains from Tuesday, with the benchmark 10-year yield at 5.21 per cent, as traders looked ahead to Wednesday’s US consumer price inflation data for further clues about the path of interest rates.

The US dollar weakened against most of its Group of 10 peers, while gold steadied around US$4,160 an ounce.

Meanwhile, the CSI 300 Index fell 0.2 per cent, pushing Chinese stocks closer to a bear market. Scepticism is growing about the prospect of a heavy dose of support measures to revive the economy and investor confidence. 

The benchmark has fallen more than 15 per cent from its June peak, and is at the lowest level since August 2025. 

Indian stocks are also in focus after Finance Minister Nirmala Sitharaman said she is keen to listen to discussions around a transaction tax imposed on trading shares as the country seeks to boost capital inflows. 

The Nifty 50 Index extended gains as she spoke on Tuesday, closing 1.6 per cent higher in its biggest advance in more than two months.

Attention later will turn to the US inflation data.

The closely-watched consumer price index is seen rising 0.6 per cent after a 0.4 per cent increase a month earlier, based on the median projection in a Bloomberg survey of economists ahead of Wednesday’s Bureau of Labor Statistics release. That would mark the largest advance in five months.

Aa higher reading than the estimate may see traders reinforce Fed rate hike expectations.

“The bottom line is that higher long rates this year reflect both the higher expected policy path from the Fed and investors asking for more compensation to hold duration,” wrote Allison Boxer at Apollo Global Management. BLOOMBERG