Asian markets were down on Tuesday after the release of weak inflation data from China, where consumer prices slowed in October to a year-on-year pace of 1.3 per cent, their weakest level since May, according to the National Bureau of Statistics.
The soft CPI data strengthen the view that China’s deflationary pressure has intensified. This raises market expectations for the People’s Bank of China to ease monetary policy further by reducing benchmark interest rates and the amount of cash that commercial banks are required to keep in reserve
China’s Shanghai Composite was down 0.4 per cent, Japan’s Nikkei was down 0.6 per cent in mid-morning trade, while Australia’s S&P/ASX 200 was down 1 per cent.
Currency markets were mostly consolidating during the Asian trade, still digesting the news of Friday’s strong U.S. nonfarm payrolls data. The stronger dollar has kept most major currencies under pressure.
EUR/USD saw more consolidation in Asia, traded a tight 1.0744-62 range. GBP/USD traded between 1.5109-24 in Asia, trying to make tracks away from 1.5129. AUD/USD opened in Asia at 0.7047, traded between 0.7041-56. USD/JPY held onto gains and consolidated between a 123.03-26 range.
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