Asian Markets React to US CPI, Commodities Shift Amid Data

Asia's markets were subdued today, with lower equities, higher local rates markets, and a slightly lower BBDXY index, all influenced by significant moves during the US session after stronger-than-expected CPI data.

• Cross-asset movements in the Asian session on Wednesday remained calm as markets absorbed the higher-than-expected US CPI data. US equity futures remained flat, and Asia equities were all in the red, with the BBG Asia Index down by 1.15%, primarily driven lower by tech names.
• Earlier today Vice Finance Minister Kanda, addressed the movement in the JPY, stating although they don't take action based on the yen hitting specific levels, they are ready 24 hours a day to get involved and support the currency. The Yen traded higher against all G10 currencies in Asia, with USDJPY grinding lower post-Kanda's address, currently trading at 150.46, down from overnight highs of 150.89. JGB futures held sharply cheaper at -44 compared to settlement levels but slightly above the session low of 145.75 (-56).
• Elsewhere in rates, Aussie yields are 8-10bps higher, with futures YM -13.0 & XM -11.0 trading cheaper and not far from Sydney session lows. NZGBs closed 5-7bps higher, with the 2/10 curve steeper.
• In commodities, gas prices continued to fall to their lowest levels since 2020 due to soft demand. European LNG prices dropped 1.2% to EUR 25.43, down 15.9% for the month, while US natural gas also fell 5.6% to $1.67, marking a 20% decline in February. Gold experienced a sharp 1.3% decline after US CPI but held steady during the Asian session. Oil prices were slightly down during APAC trading following the lower-than-expected US crude inventory report earlier. WTI, currently around $77.84, rebounded from its low of $77.52/bbl, while Brent was down 0.1% to $82.65, up from $82.33.
• Looking ahead today, UK CPI, Eurozone GDP, US MBA Mortgage Applications