Asia Shares Slip on Inflation and Economic Development Worries, RBA Puts Brakes on


Asian stocks declined on Tuesday, as concerns over growth and inflation remained a concern in the wake of OPEC+ unexpected output target cuts and weak US economic data. Hong Kong stocks took the lead with a 1.1% decline, mostly driven by technology stocks as Sino-US tensions remain elevated. In Sydney, the local stock market edged higher while the Australian dollar dropped after Reserve Bank of Australia (RBA) decided to pause its tightening policy after a series of ten straight rate hikes.

European markets are on track to open higher, anticipating an increase in the Euro Stoxx 50 futures, German DAX futures, and FTSE futures. On the other hand, U.S. stock futures, the S&P 500 e-minis, are trading slightly lower. The OPEC+ output cuts caused a surge in oil prices and complicated the inflation outlook. The move was further supported by U.S. manufacturing activity data, which to its lowest level in nearly three years, raising doubts about the effectiveness of the Fed’s monetary tightening policy.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, announced cuts to their oil output targets on Sunday. The measure drove Brent crude to a 0.44% increase to $85.3 per barrel, after jumping more than 6% overnight.

The move caused worries in the broader inflation outlook and further exacerbated market uncertainty. Although encouraging news was seen on goods inflation, analysts remained cautious. ANZ analysts said in a note: “A weakening trend has been in place since May last year, but recent banking turmoil may have dented confidence further”.

Julie Zhu is a noted business reporter from Hong Kong. She has reported widely on important topics such as mergers and acquisitions, financial markets and Asian economies. In 2013, she won the Ted Scripps Award for Business and Economics Journalism. She also holds a Bachelor of Science degree from York University in Toronto. Her reporting from Hong Kong helps to bridge crucial topics between the Asian and Western markets, and her insights have become increasingly sought after by global investors.