Anshuman Daaga

SINGAPORE, (Reuters) – Asian equities have consolidated their recent gains after investors’ sentiment improved. Strong results from U.S. businesses helped stocks recover from 2016’s worst year. A resurgent Euro slowed ahead of U.S. inflation data.

The markets remain alert to rate hikes in the United States and the eurozone, even though the European Central Bank was last week viewed as more hawkish.

The yields of the Euro zone rose sharply Monday while Italian bond prices outperformed their peers. The United States has reported stronger-than-expected jobs and earnings data. MSCI’s Asia-Pacific broadest index outside Japan rose 0.05% to 614.6, after climbing to 617.7 on January 25. This is the highest level since January 25. Now, the benchmark has risen by 3% from its Jan 27 low of 595.99 (more than a year ago)

Principal Global Investors’ chief strategist Seema Shah stated in a note that investors are concerned about the Fed’s five increases for 2022. She also said they may not be enough to control inflation.

The Fed should ease its urgency to tighten as economic prices start to fall. She also said that while U.S. economic growth may have peaked, it is not likely to fall into recession.

Stocks in Korea rose 0.4% and Taiwan grew 0.6%. Hong Kong stock fell 0.7%, while Korean stocks rose 0.4%.

They were stable and Nasdaq futures edged upward 0.06%.

It fell to 6.2% in January, the most severe start of the year since 2016.

The U.S. Consumer Price Report for January is due Thursday. It could reveal that core inflation has accelerated to 5.9%, the highest rate since 1982.

The major Wall Street stock market indexes were mixed on Monday, before closing down after markets digested mixed quarterly results by megacaps Amazon.com Inc. (NASDAQ:), and Meta Platforms (NASDAQ:). While the ended flat, the lost 0.3% and the gained 0.37% respectively. Of the 278 companies in the S&P 500 that have posted earnings as of Friday, 78.4% reported above analysts’ expectations, according to Refinitiv data.

Shah, Principal Global Investors, stated that corporate profits have been strong for decades and consumers have backed themselves by large savings. “Supply chain normalization will provide an increase in inventories and production, which should help to boost inventory and production.”

The U.S. January payrolls report on Friday showed annual growth in average hourly earnings climbed to 5.7%, from 4.9%, while payrolls for prior months were revised up by 709,000 to radically change the trend in hiring.

After a 2.7% increase last week on tightening expectation, the euro lost 0.1% at the foreign exchange market.

The euro has gained but not broken resistance of $1.1483, even though European bond yields leapt.

Dollar climbed 0.1% on the Japanese yen to 95.27, while 95.457 remained the same. Treasury yields were close to the pandemic peak, as the benchmark 10-year yield increased 1.6 basis point to 1.9358%.

On Tuesday, oil prices fell ahead of negotiations between Iran and the United States officials. This could result in the lifting of U.S. sanction on Iranian oil sales.

After hitting an all-time high of $94 Monday, the barrel was down 0.4% to $92.29 per barrel. [O/R]Prices were stable at $1,822 an ounce after a week-high.