Asian equities are gaining ahead of the US inflation report

Asian equities followed Wall Street higher on Tuesday before data traders hope to show an increase in US inflation eased in August, easing the pressure for further interest rate hikes.

Shanghai, Tokyo, Hong Kong and Sydney advance. Oil prices have fallen.

Wall Street’s benchmark S&P 500 index gained 1.1% on Monday for its fourth daily increase.

Investors have been waiting for US government data which would hopefully say inflation peaked in four decades of 9.1% in June and fell further after dropping to 8.5% in July.

Such a drop could help the Federal Reserve avoid having to raise interest rates further to a level that could plunge the US economy into recession.

The report “will likely show some relief from price pressure, but it will not stop the Fed from maintaining an aggressive stance,” Oanda’s Edward Moya said in a report.

The Shanghai Composite Index gained less than 0.1% to 3,253.92 and the Tokyo Nikkei 225 gained 0.2% to 28,614.53. Hong Kong’s Hang Seng rose 0.4% to 19,442.89.

Seoul’s Kospi was up 2.9% to 2,452.69 and Sydney’s S & P-ASX 200 was up 0.7% to 7,013.70.

Indian Sensex opened 0.6% at 60,504.83. New Zealand fell as Southeast Asian markets gained.

On Wall Street, the S&P 500 rose to 4,110.41. The Dow Jones Industrial Average gained 0.7% to 32,381.34. The Nasdaq Composite was up 1.3% to 12,266.41.

On Wednesday, the US government is expected to report August inflation at the wholesale level.

Fed officials said support for substantial rate hikes and keeping financial costs high long enough to ensure inflation dies down.

Investors hope that easing inflationary pressures will cause the Fed to back down. Similar hopes were dashed earlier when President Jerome Powell said in August that rates would remain high.

Polls show that traders expect the Fed this month to hike rates for the fifth time this year and by 0.75 percentage points, three times its usual margin. Hence, traders expect the US central bank to keep rates stable throughout the first half of 2023.

In energy markets, benchmark US crude oil gained 14 cents to $ 87.92 a barrel in e-commerce on the New York Mercantile Exchange. The contract rose 99 cents to $ 87.78 on Monday. Brent crude, the price base for the international oil trade, added 9 cents in London to $ 94.09 a barrel. He earned $ 1.16 the previous session to $ 94.

The dollar fell to 142.11 yen from 142.73 yen on Monday. The euro rose to $ 1.0150 from $ 1.0117.

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