Asian markets edge higher ahead of key US economic data and trade developments

Asian markets showed modest gains on August 11 as investors remained cautious ahead of a key US inflation report and the looming deadline for a potential extension of US tariffs on Chinese exports. While Japan's stock market was closed for a holiday, futures indicated a positive outlook, with Japan’s Nikkei 225 pushing towards its all-time high of 42,426, suggesting possible gains for the week. Stock futures in Europe also climbed, with EUROSTOXX 50 futures rising 0.2 per cent, while FTSE and DAX futures edged up 0.1 per cent and 0.2 per cent, respectively. Market attention is firmly on the US consumer price index (CPI) report, expected on August 12. Analysts forecast a 0.3 per cent monthly rise in the core CPI, pushing the annual rate to 3.0 per cent, which is above the Federal Reserve's 2 per cent target. An upside surprise could challenge market expectations for a rate cut in September.

Trade and geopolitical risks shape sentiment

Amid these economic uncertainties, global trade and geopolitics remain in focus. A crucial deadline for US tariffs on Chinese imports is set for August 12, with widespread expectations that the deadline will be extended once again. Geopolitical tensions are also high, with US President Donald Trump and Russian President Vladimir Putin scheduled to meet in Alaska later this week to discuss the ongoing Ukraine conflict. Markets will closely watch these discussions for any potential developments regarding US sanctions on Russian oil exports.

In Asia, South Korea’s market fluctuated as it digested the news that tech giants Nvidia and AMD have reportedly agreed to pay 15 per cent of their revenue from chip sales to China to the US government as part of securing export licences. Meanwhile, Chinese stocks saw a modest uptick, buoyed by consumer price inflation data that showed a slight increase in July. However, producer prices continued to decline, signalling ongoing weakness in the country’s manufacturing sector.

Oil and commodity markets in focus

Commodity markets saw mixed movements. Oil prices continued their downward trajectory, with Brent crude slipping 0.6 per cent to $66.22 per barrel, while US crude eased by 0.7 per cent to $63.44. The declines come amid speculation that US-Russia talks could lead to progress in resolving the Ukraine crisis and a potential easing of sanctions on Russian oil exports. In the gold market, futures steadied as traders awaited clarification from the US government regarding its tariff policy on gold imports, particularly from Switzerland.

(With inputs from agencies)